Penguin Solutions (AI compute infrastructure provider) shares surge 16% following earnings beat and raised 2027 revenue guidance.
Penguin Solutions shares rose 16 percent on Wednesday, trading at $74.21 after the company beat fourth-quarter expectations, guided fiscal 2027 above Wall Street consensus, and named a new chief financial officer. The stock gained $10, or 15.57 percent, following premarket advances of roughly 8 percent to $69.10.
Goldman Sachs raised its price target to $85 from $75 and maintained a buy rating. The average Wall Street target sits near $74, approximately where shares opened their rally.
Net sales in the fiscal fourth quarter reached $567 million, up 68 percent from $338 million a year earlier and ahead of the $516 million consensus. Adjusted earnings were $1 per share, topping estimates of 77 to 78 cents and up 133 percent year-over-year. Integrated memory sales hit a record $341 million, up 158 percent, while artificial-intelligence lines represented 78 percent of quarterly sales. Non-hyperscale AI infrastructure grew 99 percent.
The company signed six new AI infrastructure customers in the quarter, four of them neocloud providers, and reported that bookings outran sales, leaving a record backlog. Chief Executive Kash Shaikh said: "As we enter fiscal 2027, our memory business remains strong, and our AI Infrastructure business is accelerating further."
Management guided fiscal 2027 net sales to approximately $2.43 billion at the midpoint, up roughly 40 percent above the $2.32 billion consensus, with diluted earnings of $4.45 per share at the midpoint, up about 55 percent above the $4.01 consensus. Fiscal 2026 non-GAAP earnings were $2.87 per share. The company appointed Stephen Cumming senior vice president and chief financial officer.
Penguin Solutions sells memory, computing gear, and data-center infrastructure services. The quarter reflects two distinct growth rates: memory, the larger revenue line, more than doubled; AI infrastructure, the faster-growing segment, continued to accelerate even as legacy computing work diminished. Six new customer signings do not constitute a revenue commitment; the record backlog stands as a more reliable indicator, though the company did not disclose a specific dollar figure in initial call remarks.
The stock had already gained more than 200 percent over the past year before Wednesday. A 16 percent move on an earnings beat and upward guidance reflects market confidence in the raised outlook rather than surprise about the business itself. At $74, shares trade near the average analyst target and $11 below Goldman Sachs' new estimate. The $4.45 earnings projection and the record $341 million in quarterly memory sales are the metrics that must be delivered; Shaikh's assertion is that both will continue growing. Wednesday's $10 opening gain priced that claim.