Missed Out On Micron and Sandisk? Make Sure You Don't Miss Out On This Memory Stock.
Key PointsPenguin Solutions' memory segment more than doubled year over year, and six new customers suggest that the growth can continue.
Investors who missed the boat on early memory chip pioneers like Micron and Sandisk may find an attractive alternative in Penguin Solutions (PENG). The company has been experiencing remarkable growth, with a 68% year-over-year increase in revenue during fiscal 2026's fourth quarter. This growth is primarily driven by its integrated memory segment, which saw a staggering 158% increase year-over-year.
This segment sells DRAM modules and CXL memory modules, which are in high demand due to their role in addressing the "memory wall" bottleneck in AI data centers. Penguin Solutions CXL memory modules are particularly valuable, as they enable GPUs to access a memory pool, preventing AI chips from crashing or slowing down AI models.
The company has won six new AI infrastructure data center customers in the fourth quarter of fiscal 2026, including four neocloud providers that are aggressively scaling out data centers to meet customer demands. This influx of new customers is expected to drive revenue growth in the coming quarters or years. Penguin Solutions' valuation is currently more reasonable than many of its AI-infrastructure peers, trading at a 12.5 forward P/E ratio.
The company's net income surged by 888% year-over-year in fiscal 2026's fourth quarter, reaching $93 million. With eight consecutive EPS beats under its belt, Penguin Solutions appears well-positioned for continued growth.
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