Shares of AI infrastructure maker Penguin soared. It improved its outlook for the year
Penguin Solutions' stock price soared: it promised investors more growth than before / Photo: LinkedIn / Penguin Solutions
Penguin Solutions, a small-cap maker of AI computing infrastructure, soared more than 10% in extended trading on April 1. The company released quarterly earnings that beat Wall Street expectations and doubled its revenue guidance for the full fiscal year.
Details
Shares of Penguin Solutions jumped more than 10% to $20.2 per share in extended trading on April 1, after rising 3.7% in the main session. Then the dynamics slowed down a bit.
On Wednesday, the company reported: its revenue in the second quarter of fiscal 2026 fell 6.3% to $343 million. Wall Street had expected that figure to be $339 million, Barron's writes.
Net earnings per share (EPS) for the same period amounted to $0.52, year-on-year it did not change. Analysts forecasted EPS at $42.
How the company explained the dynamics
Penguin Solutions CEO Kash Sheikh explained the dynamics by the high demand for the company's products due to the development of artificial intelligence (his words are given in the company's message).
Penguin Solutions provides third-party companies and governments with infrastructure that helps them deploy systems quickly and scale rapidly. Its portfolio includes specialized memory solutions. It is memory that is the critical scaling factor for AI output, says Sheikh.
Strong demand for the company's solutions has allowed it to increase its EPS and net revenue growth expectations for the full fiscal year 2026. Under the new guidance, EPS is expected to be about $2.15 vs. $2 previously expected, with revenue up about 12% vs. 6% previously expected.
That's above Wall Street's forecast of $2.04 EPS for FY 2026 and 6.6% sales growth, Barron's writes.
What analysts advise
Since the beginning of the year, the quotations of Penguin Solutions fell by 6.7%. However, Wall Street is generally positive about the company's prospects: its securities have seven "buy" and one "hold" recommendations. The average target price is $26.88, which implies the potential growth of the company's securities by more than 47% to their value at the close of trading on April 1.
