Merrill Lynch analyst Vivek Arya is out with a research report and three highlighted points on Advanced Micro Devices, Inc. (NASDAQ:AMD) on the heels of the semi-conductor giant announcing a multi-year amendment to wafer supply agreements (WSA) with GlobalFoundries as well as taking additional refinancing actions.

Despite news of the strategic partnership and the refinancing steps AMD has taken, ultimately, Arya forecasts EPS losses through 2018. As such, the analyst reiterates an Underperform rating on shares of AMD with a price target of $5.00, which represents just under a 15% decrease from where the stock is currently trading. Additionally, Arya adjusts his estimates for the fiscal year of 2016 and 2017 by 4c and 10c, respectively.

First, Arya notes that though game consoles have shown upside and a bolstered balance sheet thanks to licensing and refinancing actions, the upside has a risk of peaking by next year, and he adds, “we see no evidence AMD has regained any sustainable value share in graphics vs NVDA, or in servers vs. INTC.”

Second, Arya believes, “AMD’s new Zen server could take several quarters after its mid 2017 launch to get any traction with enterprise/cloud customers, who are increasingly looking for more rack-scale solutions (CPU, FPGA, memory, interconnects) and deep learning features where AMD is substantially behind INTC and NVDA.”

Third, the new Zen server could also serve to “potentially lower quality of earnings from exclusion of WSA costs,” he concludes.

As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, five-star analyst Vivek Arya is ranked #338 out of 4,163 analysts. Arya has a 53% success rate and realizes 11.0% in his annual returns. When recommending AMD, Arya yields 5.7% in average profits on the stock.

TipRanks analytics indicate AMD as a Hold. Based on 16 analysts polled in the last 3 months, 5 rate a Buy on AMD, 5 maintain a Hold, while 6 issue a Sell. The consensus price target stands at $5.39, marking an 8% downside from where the stock is currently trading.