Shares of Penguin Solutions (NASDAQ: PENG) spiked on Wednesday after the artificial intelligence (AI) infrastructure provider boosted its full-year growth forecast.
Image source: Getty Images.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
Impressive AI-fueled gains
Penguin’s net sales jumped 48% year over year to $479 million in its fiscal 2026 third quarter, which ended on May 29. Growth was driven by new customer wins and higher sales to existing clients.
Rising demand for agentic AI and inference is creating an urgent need for high-performance memory. With demand outpacing supply, Penguin is enjoying strong pricing power, which is bolstering its profit margins.
“Memory business net sales were outstanding at $275 million, up more than 111% year over year, supported by both higher volume and pricing,” CEO Kash Shaikh said during a conference call with analysts.
All told, Penguin’s adjusted operating income surged 67% to $64 million, while its adjusted earnings per share soared 79% to $0.47.
This AI growth story is still in its early chapters
These strong results and “robust” AI-driven demand trends prompted Penguin to lift its full-year revenue and profit guidance. Management now projects net sales growth of roughly 22% and adjusted earnings of 2.60 per share in fiscal 2026.
“As inference and agentic AI workloads become more persistent and context-rich, memory is increasingly becoming one of the primary performance and scalability bottlenecks,” Shaikh said. “Penguin is well-positioned at the intersection of memory and AI infrastructure to help customers address these evolving requirements.”
Should you buy stock in Penguin Solutions right now?
Before you buy stock in Penguin Solutions, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Penguin Solutions wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $410,833!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,208,693!*
That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul.