Is PENG a good stock to buy? We came across a bullish thesis on Penguin Solutions, Inc. on InfoArb Sheets’s Substack. In this article, we will summarize the bulls’ thesis on PENG. Penguin Solutions, Inc.’s share was trading at $26.74 as of April 17th. PENG’s trailing and forward P/E were 38.20 and 8.12 respectively according to Yahoo Finance.
Penguin Solutions, Inc. designs, builds, deploys and manages enterprise solutions worldwide. PENG is positioned as an emerging AI infrastructure and memory-centric technology company transitioning from a hyperscaler-dependent model toward a diversified enterprise, neocloud, and sovereign AI customer base. In Q2 2026, Penguin Solutions reported revenue of $343.0 million versus $365.5 million year-over-year, with Non-GAAP EPS flat at $0.52, reflecting a transitional quarter where mix shift outweighed top-line softness.
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Despite the revenue decline, the company strengthened its strategic narrative as memory demand and pricing momentum supported performance, while Advanced Computing underwent a deliberate reset away from concentration risk. Management emphasized that underlying non-hyperscaler AI and HPC demand remains strong, with 50% growth in the first half and rising contribution mix, suggesting improving business quality beneath headline volatility.
Penguin Solutions’ Integrated Memory segment continues to act as the primary growth engine, benefiting from AI-driven storage intensity and constrained supply conditions, while Optimized LED remains stable with episodic tariff-related dynamics.
The strategic opportunity is increasingly centered on inference-driven AI infrastructure, particularly CXL-based memory systems and MemoryAI solutions, which could shift Penguin Solutions toward higher-margin system-level offerings over time. Although gross margin guidance was revised downward due to mix effects and memory cost inflation, EPS guidance improvement signals operational discipline and potential leverage from below-the-line efficiencies.
With a net cash balance sheet, improving customer diversification, and early enterprise adoption across financial services, healthcare, energy, and sovereign AI, Penguin Solutions presents a transitioning AI platform story. Valuation reflects skepticism on Advanced Computing, but inference shift, enterprise growth, memory scarcity support re-rating potential.
Previously, we covered a bullish thesis on Pure Storage, Inc. (PSTG) by Magnus Ofstad in March 2025, which highlighted subscription-driven platformization, resilient storage demand, and AI tailwinds. PSTG’s stock price has appreciated by approximately 37.74% since our coverage. InfoArb Sheets shares a similar view but emphasizes a broader AI infrastructure transition in Penguin Solutions (PENG), focusing on inference-led memory systems and enterprise diversification.
Penguin Solutions, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held PENG at the end of the fourth quarter which was 29 in the previous quarter. While we acknowledge the risk and potential of PENG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PENG and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
