As US technology stocks are about to enter the second quarter earnings season, Goldman Sachs recently released a research report on the three major semiconductor giants in the United States, AMD, Arm, and Intel.

Goldman Sachs maintains a 'buy' rating for AMD and Arm in its report, and a 'sell' rating for Intel.

Goldman Sachs expects AMD's second quarter performance and future guidance to meet market expectations, particularly with the data center business expected to achieve double-digit growth. For Arm, Goldman Sachs expects its second quarter performance and future guidance to exceed market expectations, with a compound annual growth rate (CAGR) of 23% expected for revenue over the next three years. In contrast, Goldman Sachs believes that Intel's Q2 performance and future guidance may disappoint Wall Street, and expects its server CPU market share to continue to be squeezed by peers.

AMD: Strong expansion of data center business

AMD is scheduled to release its second quarter financial report on July 30th. Wall Street generally expects AMD's Q2 revenue to reach $5.72 billion, a year-on-year increase of 6.7%, and adjusted earnings per share (EPS) to be $0.68, a year-on-year increase of 18.0%. Among them, the revenue of data center business is expected to increase significantly by 108.6% year-on-year to 2.76 billion US dollars, and also increase by 17.9% month on month.

Goldman Sachs believes that AMD's second quarter performance is expected to be in line with market expectations, and the GPU business is expected to achieve strong expansion.

Specifically, Goldman Sachs expects AMD's CPU business to grow compared to the previous quarter, with the update cycles of AIPC and enterprise PCs partially offsetting the impact of weak demand in the consumer sector. At the same time, the GPU business in data centers is expected to achieve strong month on month growth, with growth rates expected to reach double digits.

Although the revenue of embedded business will increase month on month, the expected growth may be affected by weak demand in the industrial, communication infrastructure, and automotive terminal markets.

Nevertheless, Goldman Sachs remains optimistic about AMD's long-term growth potential and expects the company's management to increase their annual data center GPU revenue forecast from the previous $4 billion to around $4.5 billion.

Based on the above reasons, Goldman Sachs maintains a "buy" rating on AMD, with a target price of $175 for the next 12 months.

Arm: Optimistic revenue growth in the next three years

Arm's second quarter financial report will be released shortly after AMD.

Wall Street expects Arm's Q2 revenue to be $905 million, a year-on-year increase of 34.0%, adjusted earnings per share of $0.34, a year-on-year increase of 43.2%, and adjusted net profit of $358 million, a month on month increase of 45.7%.

Goldman Sachs' evaluation of Arm is equally positive, and it expects Arm's performance and guidance in the second quarter to exceed market expectations. Goldman Sachs' earnings per share expectations for the second and third quarters are $0.36 and $0.29, respectively, which are 6% and 7% higher than the market's general expectations.

Goldman Sachs believes that from fiscal year 2025 to fiscal year 2027, Arm's revenue is expected to achieve a compound annual growth rate of 23%, and the compound annual growth rate of non GAAP earnings per share (excluding stock compensation) will reach 29%, significantly higher than the industry median.

Goldman Sachs maintains a 'buy' rating on Arm and sets its target price for the next 12 months at $143.

Intel: Market share under pressure

Intel's second quarter financial report will be released on August 1st. According to the consensus on Wall Street, Intel's revenue for the second quarter is expected to be $12.96 billion, a year-on-year increase of only 0.09%, and adjusted earnings per share are expected to be $0.103, a year-on-year decrease of 20.8%.

In contrast, Goldman Sachs is more cautious in its rating of Intel.Goldman Sachs pointed out that Intel's market share in the server CPU market is being strongly challenged by competitors such as AMD, and its product line update speed has failed to keep up with changes in market demand. Therefore, Goldman Sachs predicts that Intel's second quarter performance and future outlook may disappoint investors.

Goldman Sachs expects Intel's Q2 revenue to be in line with market consensus, but Q3 revenue and non GAAP earnings per share (excluding stock compensation) guidance will be slightly lower than market expectations.

Goldman Sachs suggests investors pay attention to Intel's progress in responding to market competition, accelerating product innovation, and optimizing cost structure.

Goldman Sachs maintains a 'sell' rating on Intel, with a target price of $29 for the next 12 months.