Bank of America initiates buy rating on Penguin Solutions amid AI boom

Bank of America has started covering Penguin Solutions with a Buy rating and a $100 price target. The bank initiated coverage on October 9, 2026, and the target points to potential upside of approximately 40% from the stock’s prior close of around $71.57. The pitch rests on two pillars: the growth of agentic AI and Penguin’s expertise in high-performance computing. The call arrived just days after Penguin posted a quarter that made its existing analysts look conservative. The numbers behind the call Penguin Solutions, which trades on the Nasdaq under the ticker PENG, reported fiscal Q4 2026 results on October 6. Net sales came in at $567 million, a 68% jump year-over-year. Non-GAAP earnings per share landed at $1.00, clearing the consensus estimate of approximately $0.77. Management also raised its fiscal 2027 revenue outlook to about $2.43 billion at the midpoint. That figure implies growth of around 40% for the year ahead. AI-related work now makes up 78% of Penguin’s sales, and that segment grew 141% year-over-year. Penguin is deploying a 36,000-GPU AI factory in Norway for a neocloud customer. That client holds $10 billion in contracted compute from a leading AI lab. In the tra...