The small-signal amplification properties of a semiconductor laser are quantified within the framework of dynamical-systems bifurcation theory. Calculations are performed at or near a Hopf bifurcation associated with a modal switching instability in the device. The work is directed at finding practical applications for nonlinear dynamical phenomena. In addition the work underlines the importance of the laser diode as a convenient optical system for studying the properties of general dynamical systems. It is argued that the laser diode may thus play a unique role both in stimulating the need for new insights into dynamical systems and also in permitting implementation of novel nonlinear phenomena for device applications.