The Outpost is a comprehensive collection of curated artificial intelligence software tools that cater to the needs of small business owners, bloggers, artists, musicians, entrepreneurs, marketers, writers, and researchers.
© 2025 TheOutpost.AI All rights reserved
Curated by THEOUTPOST
On Sat, 2 Nov, 12:02 AM UTC
2 Sources
[1]
Goldman has a new AI play where it sees nearly 40% upside
Penguin Solutions could be a breakout player in the expanding artificial intelligence boom, according to Goldman Sachs. The Wall Street investment bank on Friday initiated coverage of the enterprise AI company, which changed its name from SMART Global Holdings last month , with a buy rating and a $21 per share price target. Goldman's forecast implies roughly 40% upside from Thursday's $15.05 close. Penguin shares had pulled back more than 20% in 2024 through Thursday, but are about 5.5% higher in early trading Friday. PENG YTD mountain Penguin Solutions shares in 2024. Penguin designs and manufactures enterprise solutions for markets including computing, memory and light-emitting diode ( LED) lighting. Its advance computing segment has exposure to AI and machine learning, as does its memory sector. "PENG is well positioned to address the growing enterprise AI compute opportunity through its Penguin Computing integrated solution, where the company has 25 years of experience designing, building, deploying and managing high-performance computing projects," Goldman analyst Michael Ng said. While Penguin's LED and memory businesses are more cyclical and thus face some drawbacks, Ng said the potential growth runway thanks to generative AI can more than make up for any decline in revenue. "We are encouraged by PENG's exposure to enterprise AI demand, which should help drive PENG revenue to grow at a 13% 5-yr CAGR (F2024-29) and expand operating margins, driven by growth in its compute business and a recovery in the more cyclical memory and LED markets," Ng added.
[2]
Goldman bullish on Penguin Solutions stock as AI demand boosts revenue outlook By Investing.com
On Friday, Goldman Sachs (NYSE:GS) began covering Penguin Solutions (NASDAQ: PENG), issuing a Buy rating and setting a price target of $21.00 for the company's stock. The financial institution highlighted Penguin Solutions' strong position in the enterprise AI compute sector, bolstered by the company's 25 years of experience in high-performance computing projects. Penguin Solutions' revenue streams are diverse, with approximately half of its total revenue in fiscal year 2024 deriving from the more volatile memory and LED markets. Despite this cyclicality, Goldman Sachs expressed optimism about the company's involvement in the enterprise AI space, which is anticipated to contribute to a revenue growth rate of 13% over a five-year compound annual growth rate (CAGR) from fiscal year 2024 to 2029. The forecast also includes an expansion in operating margins, fueled by the growth of Penguin Solutions' compute business and a rebound in the memory and LED segments. The analyst noted that the current trading multiple for Penguin Solutions at 9 times the next twelve months' (NTM) price-to-earnings (P/E) ratio is appealing. This valuation is thought to reflect the company's historical exposure to more cyclical markets and its inconsistent performance in capitalizing on AI infrastructure investments. Goldman Sachs' stance on Penguin Solutions is based on the expectation that the demand for enterprise AI will drive the company's revenue growth and margin expansion. This positive outlook is set against the backdrop of Penguin Solutions' established expertise and anticipated recovery in its more cyclical business areas.
Share
Share
Copy Link
Goldman Sachs initiates coverage of Penguin Solutions with a Buy rating, citing the company's strong position in enterprise AI computing and potential for significant growth driven by increasing demand for AI solutions.
Goldman Sachs has initiated coverage on Penguin Solutions (NASDAQ: PENG), formerly known as SMART Global Holdings, with a bullish outlook on the company's potential in the artificial intelligence (AI) market. The Wall Street investment bank has assigned a Buy rating to Penguin Solutions, setting a price target of $21 per share, which implies a nearly 40% upside from the stock's recent closing price 12.
Penguin Solutions is an enterprise AI company that designs and manufactures solutions for computing, memory, and LED lighting markets. With 25 years of experience in high-performance computing projects, the company is well-positioned to address the growing enterprise AI compute opportunity through its Penguin Computing integrated solution 1.
Michael Ng, an analyst at Goldman Sachs, emphasized the company's strong position in the enterprise AI compute sector, stating, "PENG is well positioned to address the growing enterprise AI compute opportunity through its Penguin Computing integrated solution" 1.
Goldman Sachs projects a robust growth trajectory for Penguin Solutions, forecasting a 13% five-year compound annual growth rate (CAGR) in revenue from fiscal year 2024 to 2029. This growth is expected to be driven primarily by:
The analyst also anticipates an expansion in operating margins, fueled by these growth factors.
Currently, Penguin Solutions trades at a multiple of 9 times the next twelve months' (NTM) price-to-earnings (P/E) ratio. Goldman Sachs views this valuation as attractive, considering it reflects the company's historical exposure to cyclical markets and its inconsistent performance in capitalizing on AI infrastructure investments 2.
While Penguin Solutions faces some challenges due to the cyclical nature of its LED and memory businesses, which account for approximately half of its total revenue in fiscal year 2024, Goldman Sachs believes that the potential growth in the AI sector can more than compensate for any decline in these areas 12.
Following the initiation of coverage by Goldman Sachs, Penguin Solutions' shares saw a positive market response, rising about 5.5% in early trading on Friday. This uptick comes after a more than 20% pullback in the stock's value since the beginning of 2024 1.
As the AI boom continues to expand, Penguin Solutions appears poised to capitalize on the growing demand for enterprise AI solutions, potentially emerging as a significant player in this rapidly evolving market.
SMART Global Holdings rebrands as Penguin Solutions, focusing on AI infrastructure and enterprise solutions. The company reports Q4 earnings miss and provides weaker-than-expected guidance, causing a 15% stock plunge.
2 Sources
2 Sources
Goldman Sachs has increased its target for Chinese stocks, forecasting that AI adoption could boost earnings and attract significant investments. The bank's analysts predict a substantial rise in Chinese equities, driven by the implementation of AI technologies like DeepSeek.
3 Sources
3 Sources
SGH, formerly known as SMART Global Holdings, announces a strategic rebranding to Penguin Solutions. This move aligns with the company's shift towards AI and edge computing solutions, reflecting its evolving business focus and market positioning.
4 Sources
4 Sources
Goldman Sachs' trading desk recommends buying AI stocks during the current dip, citing potential for long-term growth despite short-term interest rate concerns.
2 Sources
2 Sources
Goldman Sachs analysts highlight the importance of earnings revisions in determining the sustainability of the AI-driven market rally. They also provide insights on where to invest in the current market landscape.
2 Sources
2 Sources
