While many investors are optimistic over AMD's (NASDAQ: AMD) new products, Barclays is pouring cold water on the company's new server offering saying the chip-maker will make little headway against Intel's (NASDAQ: INTC) superior processor.

The bank's semiconductor analyst Blayne Curtis lowered his rating on the company's shares to underweight from equal weight and reaffirmed his $9 price target for AMD, representing 35 percent downside from Monday's close.

AMD shares fell 4 percent on midday Tuesday after the report.

After the launch of AMD's and Intel's new server chips "and seeing third party bench marks for both, we believe the rubber is meeting the road and gain conviction [AMD's] Epyc will not gain enough traction to support [the] current valuation," Curtis wrote in a note to clients Tuesday. "We have conducted regular channel checks since the fall and are still hearing little to no material traction at the ODMs [original design manufacturers of computers], which is the ultimate gauge of success."

AMD released its Epyc server chip line in June.

The company's shares are one of the market's best performing equities in the past year with the stock up nearly 150 percent in the past 12 months through Monday compared with the S&P 500's 13.5 percent return. That performance ranks No. 2 in the entire S&P 500 (INDEX: .SPX), according to FactSet. The chip-maker's shares are also up 22 percent this year versus the market's 10 percent performance.

Curtis cited how Intel's server chips have "faster max clock speeds," which outperform AMD's offering in a wider array of applications. In addition, Intel's server chips have quicker connections to the computer's memory, according to the analyst.

Memory "latency is a critical shortcoming for Epyc," he wrote.

The analyst also downplayed the sustainability of recent AMD graphics card demand from digital currency miners.

"There has been a lot of recent buzz on cryptocurrency mining specifically with Ethereum, which we view as a short term demand stimulus rather than longer term trend," Curtis wrote. "However, we acknowledge this could boost AMD's results and guidance into September."

AMD sent the following statement in response to this story:

We are confident in the performance and value we are delivering to the server market with EPYC, as well as our long-term roadmap. Moreover, our customers and the ecosystem are excited about the return of competition to the datacenter, as demonstrated by the strong show of support at our launch event less than 30 days ago.