Penguin Solutions posts 68% revenue jump as AI memory demand lifts smaller players

The AI memory boom has a famous headliner in Micron. Penguin Solutions is making a case for a spot further down the bill.

The company, which trades on Nasdaq under the ticker PENG, reported fiscal fourth-quarter 2026 net sales of $567 million. That figure was up 68% from the same quarter a year earlier, and earnings per share climbed even faster.

The numbers behind the quarter

Diluted earnings per share landed at $1.00, a 133% increase year over year. The result came in ahead of consensus expectations.

The engine was AI. Penguin’s AI-driven businesses accounted for 78% of quarterly revenue, and that slice grew 141% from a year ago.

The standout unit was Integrated Memory. Its revenue rose 158% to reach $341 million, which means that segment alone generated well over half the quarter’s sales.

The quarter also marked a sharp acceleration. Full-year fiscal 2026 revenue came to $1.73 billion, up 26% year over year, so the fourth quarter’s 68% pace was far ahead of the annual average.

On the customer front, Penguin added six new AI infrastructure clients during the quarter. Four of them were neoclouds, the newer cloud providers that rent out GPU computing capacity without being one of the giant hyperscalers.

Management then raised its outlook. Penguin now guides for approximately $2.43 billion in fiscal 2027 revenue, roughly 40% growth at the midpoint, along with non-GAAP diluted EPS of about $4.45.

The Micron comparison

Micron’s revenue rose by almost 400% year over year in its fiscal 2026 fourth quarter, according to The Motley Fool. Demand for its memory chips remains extremely strong.

Micron CEO Sanjay Mehrotra has projected an even stronger fiscal 2027. The stock has roughly tripled this year, though it has drifted lower and sideways over the past few months.

The Motley Fool’s analysis cautioned that the strong outlook doesn’t mean investors should rush to buy Micron shares. A stock that has already tripled leaves less room for surprises, even when the fundamentals look great.

Micron makes memory chips at enormous scale. Penguin focuses on specialty memory modules and AI infrastructure services, sitting closer to the customer and helping assemble and deploy the systems those chips end up in.

Background: a company that changed its name and its focus

Penguin Solutions used to be called SMART Global Holdings. The rebrand came alongside a strategic pivot toward AI infrastructure and specialty memory.

When nearly four out of every five revenue dollars come from AI-linked businesses, the company is effectively an AI infrastructure play now.

What this means for investors and the AI supply chain

The most interesting detail may be the customer mix rather than the headline revenue figure. Four of six new AI infrastructure wins came from neoclouds.

That matters because the hyperscalers, the biggest cloud names, have enormous bargaining power and often build much of their infrastructure in-house. A supplier that wins business in the non-hyperscale and neocloud market can potentially secure steadier, more diversified revenue streams.

The research supporting Penguin’s case points to its visibility within that segment as a reason analysts find its outlook compelling.

The fiscal 2027 guidance is the other key signal. Raising the forecast to around $2.43 billion implies management expects growth to stay well above the 26% pace of fiscal 2026, even if it cools from the fourth quarter’s 68%.

Penguin’s stock (PENG) has seen year-to-date gains exceeding the broader tech sector despite recent pullbacks.