Penguin Solutions shares jump 18% after strong AI quarter

Penguin Solutions shares jumped 18% Wednesday after the company reported stronger-than-expected fiscal third-quarter results, prompting analysts to raise price targets amid rising demand for AI memory and infrastructure and an expanded partnership with NVIDIA.

Penguin reported record fiscal third-quarter revenue of $479 million, up 48% from a year earlier, and adjusted earnings per share of $0.84. Analysts had expected about $421 million in revenue and $0.56 in adjusted EPS.

Management reported that Integrated Memory revenue more than doubled year over year and that sales of AI infrastructure offerings gained momentum.

CEO Kash Shaikh attributed the results to accelerating demand tied to AI workloads, saying, “We are seeing very strong AI-driven customer demand for memory and AI infrastructure solutions. As inference and agentic AI workloads become more persistent and context-rich, memory is increasingly becoming one of the primary performance and scalability bottlenecks.”

After the quarter, Penguin raised its fiscal 2026 guidance for a second consecutive quarter. The company now expects revenue to grow about 22% year over year, plus or minus 2%, and increased its full-year EPS forecast to $2.60 from $2.15, with a $0.05 range.

Citizens raised its price target to $85 from $65 while maintaining an Outperform rating, citing the company’s investments in AI-driven product development and the exit from non-core businesses. Stifel raised its target to $75 from $66 and kept a Buy rating, pointing to stronger results in the memory business and expected momentum into fiscal 2027 as memory demand persists and the AI Factory Platform expands.

Earlier this year Penguin became an NVIDIA AI Factory Specialized Partner, a designation that requires completing NVIDIA training and demonstrating the ability to design, deploy and operate full-stack NVIDIA-based AI factory infrastructure for enterprise and hyperscale customers. Penguin noted the partnership supports growth of its AI Factory Platform as enterprises invest in more demanding AI workloads.

Penguin’s stock has gained nearly 221% so far in 2026. The latest quarterly beat and the upgraded guidance coincided with the share-price jump after the earnings release.

Analysts and company executives cited the firm’s focus on AI-related products and the scaling of higher-margin businesses when explaining their revised forecasts.