Penguin Solutions' Memory Business Soars on AI Demand. Can Its Stock Rally Again? -- Barrons.com
Dow Jones2026/10/06 21:59By Ty Roush Penguin Solutions' memory business offered another sign on Tuesday that artificial-intelligence data centers are driving demand for hardware, and the company's raised outlook may help revive a stock rally that has faltered in recent months. Shares rose 5.1% in after-hours trading after ending Tuesday's session up 5.7%, at $64.21. Shares are up 228% this year, pacing their best annual performance on record, but are down 21% since hitting a record closing high of $81.39 on July 9, according to Dow Jones Market Data. Penguin Solutions posted fiscal fourth-quarter earnings of $1 a share, a 133% year-over-year rise, and net sales of $567 million, up 68%. Wall Street projected earnings of 77 cents a share and $521 million in net sales, according to FactSet. The company provides AI computing infrastructure as well as memory products used in servers and data centers. Rather than manufacturing chips, Penguin Solutions packages them into products designed for use in competing systems. Its revenue expansion has concentrated in its memory business, but the company has had to build up inventory and other working capital to support that growth, weighing on cash flow while profit margins remain under pressure. Its surging sales point to broader demand for the hardware needed to support increasingly powerful AI systems. Integrated memory sales hit $340.8 million in the fourth quarter, up 158% from the prior year and exceeding consensus estimates of $318 million. Fiscal-year memory sales reached $924 million, nearly doubling from the previous year's $464 million. During the company's third-quarter earnings call in July, analysts projected Penguin Solutions' memory revenue to approach $300 million the following quarter. That came after Penguin Solutions reported a 111% jump in memory sales to $247 million at the time, driven by AI-related data-center demand. The company reported fiscal-year adjusted earnings of $2.87 a share and net sales of $1.73 billion. Analysts expected adjusted earnings of $2.62 a share and $1.68
By Ty Roush
Penguin Solutions' memory business offered another sign on Tuesday that artificial-intelligence data centers are driving demand for hardware, and the company's raised outlook may help revive a stock rally that has faltered in recent months.
Shares rose 5.1% in after-hours trading after ending Tuesday's session up 5.7%, at $64.21. Shares are up 228% this year, pacing their best annual performance on record, but are down 21% since hitting a record closing high of $81.39 on July 9, according to Dow Jones Market Data.
Penguin Solutions posted fiscal fourth-quarter earnings of $1 a share, a 133% year-over-year rise, and net sales of $567 million, up 68%. Wall Street projected earnings of 77 cents a share and $521 million in net sales, according to FactSet.
The company provides AI computing infrastructure as well as memory products used in servers and data centers. Rather than manufacturing chips, Penguin Solutions packages them into products designed for use in competing systems.
Its revenue expansion has concentrated in its memory business, but the company has had to build up inventory and other working capital to support that growth, weighing on cash flow while profit margins remain under pressure.
Its surging sales point to broader demand for the hardware needed to support increasingly powerful AI systems.
Integrated memory sales hit $340.8 million in the fourth quarter, up 158% from the prior year and exceeding consensus estimates of $318 million. Fiscal-year memory sales reached $924 million, nearly doubling from the previous year's $464 million.
During the company's third-quarter earnings call in July, analysts projected Penguin Solutions' memory revenue to approach $300 million the following quarter. That came after Penguin Solutions reported a 111% jump in memory sales to $247 million at the time, driven by AI-related data-center demand.
The company reported fiscal-year adjusted earnings of $2.87 a share and net sales of $1.73 billion. Analysts expected adjusted earnings of $2.62 a share and $1.68 billion in net sales. Penguin Solutions previously issued higher-end guidance of $2.65 and $1.7 billion, respectively.
It used about $152 million of cash in operating activities for the fiscal year, compared with $109 million of cash generated a year earlier. The company's inventory nearly tripled year over year to $749 million, up from $255 million.
Penguin Solutions separately raised its fiscal 2027 revenue guidance to $2.43 billion at the midpoint, up from a preliminary estimate of $2.1 billion.
The guidance boost is driven by the company's accelerating AI infrastructure business, while its memory business "remains strong," CEO Kash Shaikh said in a news release.
Write to Ty Roush at tyler.roush@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
October 06, 2026 17:59 ET (21:59 GMT)
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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