Advanced Micro Devices looks like a smart bet for investors despite big-picture concerns about the semiconductor sector, according to Morgan Stanley. Analyst Joseph Moore resumed coverage of the semiconductor stock with an overweight rating, saying in a note to clients that AMD appears to be leader in an industry facing headwinds. "Our market view for semiconductors is cautious, particularly for 2023, but after the recent selloff, AMD offers potential for solid numbers at a reasonable valuation, with probably the best chance in our coverage of achieving consensus numbers this year and next," Moore wrote. Shares of AMD have fallen more than 40% this year in what has been a hard pullback across the semiconductor space. The industry is tied to overall economic growth, which may mean investors need to be patient for a rebound. Still, Morgan Stanley believes that AMD is undervalued at current levels. "While the demand picture across all of the end markets is mixed given the plateauing economy, we think that the stock has over-corrected - we see share gains and mix improvement allowing them to power through more than most with double digit growth next year, and with the stock down over 48% from its 4Q21 highs, we see the risks as largely priced in," Moore wrote. Morgan Stanley set a price target of $103 per share for AMD, which is nearly 23% above where the stock closed on Tuesday. — CNBC's Michael Bloom contributed to this report.