Penguin Solutions Beats Q4 Estimates and Lifts FY2027 Outlook on AI Infrastructure Demand; Needham Raises Target to $85

PENG reported fiscal fourth-quarter adjusted earnings of $1.00 per share, against a $0.77 consensus, on revenue of $566.68 million versus the $520.99 million expected. Net sales rose 68% year over year, and shares climbed about 13% in the session after the October 6 after-hours release. Needham raised its price target to $85 from $80 and kept a buy rating, while MarketBeat's tally of analysts puts the consensus at Moderate Buy with an average target of $65, close to the $64.21 the stock opened at on October 7.

The growth came from AI infrastructure. Non-hyperscale AI infrastructure and memory made up 78% of quarterly net sales and grew 141% from a year earlier, and the company added six AI data-center customers in the quarter, four of them neoclouds, including a 36,000-GPU build in Norway. Advanced Computing grew 99% year over year, and management said its memory backlog now extends at least four quarters as CXL demand strengthens.

For fiscal 2027, Penguin guided to EPS of $3.75 to $5.15 and revenue of $2.3 billion to $2.6 billion, above analyst expectations. That works out to roughly 40% sales growth, and the midpoint sits above the $2.17 billion preliminary view the company had given earlier.

The wide EPS range is the thing to watch: the gap between $3.75 and $5.15 reflects how lumpy AI cluster deployments can be. Follow-through on the new neocloud customers, memory pricing, and whether the backlog converts on schedule will decide where in that range the year lands.