Goldman Sachs Assumes Penguin Solutions (PENG) Coverage with Buy Rating, $25 PT

Penguin Solutions Inc. (NASDAQ:PENG) is 1 of the best tiny headdress tech stocks to put successful now. On January 13, Goldman Sachs assumed sum of Penguin Solutions with a Buy standing and a revised terms people of $25, which was brought down from $26. While acknowledging that the company’s FY2026 outlook appears noisy, the steadfast remains encouraged by the momentum of Penguin’s AI infrastructure wrong its halfway lawsuit base.

In FQ1 2026, Penguin Solutions reported a gross of $343 million, which was a 1% year-over-year summation achieved contempt the lack of hyperscale hardware revenue. Growth was led by the Integrated Memory business, which surged 41% annually to $137 cardinal owed to the modulation to DDR5 exertion and AI computing demand, portion Advanced Computing gross roseate 9% sequentially to $151 million.

Despite these gains, the institution faced a 18% sequential diminution successful its Optimized LED concern owed to anemic request successful China and ample US OEM sectors. Management besides highlighted challenges regarding the wind-down of the high-margin Penguin Edge business, which is expected to cease by the extremity of fiscal 2026, and a 9% diminution successful services nett sales. Penguin Solutions present expects a stronger H2 of the twelvemonth arsenic it shifts absorption toward endeavor and sovereign AI opportunities, leveraging partnerships with Dell, CDW, and Nvidia to diversify its lawsuit basal beyond accepted hyperscalers.

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Penguin Solutions Inc. (NASDAQ:PENG) designs, builds, deploys, and manages endeavor solutions worldwide. The institution operates done 3 segments: Advanced Computing, Integrated Memory, and Optimized LED.

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Disclosure: None. This nonfiction is primitively published at Insider Monkey.