** Shares of chipmaker Advanced Micro Devices AMD.O fall 2.74% to $107.17 premarket after Jefferies downgrades to "hold" from "buy"

** Brokerage believes AMD's traction in AI is limited and sees increased competition from Intel INTC.O

** Earlier this month, TSMC 2330.TW pitched AMD and other chipmakers about taking stakes in a joint venture that would operate INTC's factories, according to four sources familiar with matter

** Brokerage says NVIDIA's NVDA.O H200 chip outperforming AMD's MI300x AI chip in real-world tests as per its proprietary data; expects similar performance gap to Nvidia's flagship Blackwell and Rubin chips

** Jefferies trims AMD PT to $120 from $135

** Analysts' average rating is equivalent of "buy"; median PT is $140 - data compiled by LSEG

** Stock down ~8.7% YTD vs ~14% decrease in S&P 500 semiconductors index .SPLRCELCS

(Reporting by Rashika Singh in Bengaluru)

((rashika.singh@thomsonreuters.com))