Wall Street's mostly negative reaction to Advanced Micro Devices, Inc. (NASDAQ: AMD) continued Monday as analysts at Morgan Stanley turned bearish on the stock. The firm's Joseph Moore downgraded AMD's stock rating from Equal-Weight to Underweight with a price target slashed from $11 to $8.

Heading into AMD's earnings report last week, an Equal-Weight rating was justified under the belief the company would report numbers good enough to justify the valuation, Moore said in the downgrade report. The company's earnings report showed that the fundamental outlook isn't as robust as previously thought.

Specifically, momentum for microprocessors has been slow to build although this was offset by gains in the cryptocurrency segment, the analyst wrote. Moving forward, the cryptocurrency segment will "gradually fade," and AMD will also see a decline in demand from consoles while graphics will be flattish.

For AMD to at the very least match the Street's estimates for 2018, its microprocessor business needs to grow by 60 percent, or $880 million. As such, this creates a scenario where upside to the current stock price is limited in 2018 and beyond.

"To be clear, we admire what the company has accomplished on a fraction of its competitors' budgets in both microprocessors and graphics," the analyst said. "Our cautious view is based entirely on the current stock price."

In Monday's pre-market session, shares of AMD were down 3.8 percent at $11.39.

Related Links:

Cramer Says The AMD Party Is Over, Calls Out Twitter Trolls

A Quick Breakdown Of AMD's New Ryzen Mobile Processors