Morgan Stanley analyst Joseph Moore said he likes the joint venture deal AMD signed with THATIC for China, but he believes there are still many questions remaining regarding the pact and that the market has so far overvalued the deal. While there are positives, such as earnings benefits to AMD, there are also negatives, such as the potential negative impact to AMD's server prospects going forward, Moore tells investors. New product progress remains the most important issue for AMD and Moore sees the chance that AMD could issue equity or equity linked securities with its shares at current levels. The firm keeps an Underweight rating on AMD shares with a price target of $2.65.

As previously reported, Erste Group downgraded AMD (AMD) to Hold from Buy. The valuation is "significantly higher than the P/E ratio of the peer group," as well as compared to "much stronger competitor" Nvidia (NVDA), the analyst tells investors. The firm adds that upside potential for AMD "appears limited at present."