This AI Infrastructure Stock Has Soared Over 220% This Year — Why Wall Street Sees Another 36% Upside Potential

Analysts at Citizens raised their price target for Penguin Solutions to $85 from $65 while keeping an ‘Outperform’ rating.

• Citizens stated in its note that Penguin's investments in AI-driven product development and its exit from non-core businesses position the company for stronger long-term growth.
• The firm also said Penguin's financial profile is expected to improve after a transitional fiscal 2026, supported by a higher-quality business mix.
• Stifel added that its confidence in the company's growth is supported by an improved fiscal 2026 outlook and early expectations for continued momentum in fiscal 2027.

Shares of Penguin Solutions Inc. (PENG) are up nearly 221% in 2026 so far, but Wall Street believes that there is more fuel left in the tank following the company’s beat-and-raise third quarter (Q3) results.

According to TheFly, analysts at Citizens raised their price target for Penguin Solutions to $85 from $65 while keeping an ‘Outperform’ rating, implying an upside potential of 36% from Tuesday’s closing price.

Penguin Solutions shares were up nearly 4% in Wednesday’s pre-market trade. PENG was among the top trending tickers on Stocktwits at the time of writing.

Why Wall Street Is Bullish On PENG

Wall Street is bullish on Penguin Solutions as analysts see the company benefiting from continued demand for AI infrastructure and memory products.

Citizens stated in its note that Penguin's investments in AI-driven product development and its exit from non-core businesses position the company for stronger long-term growth.

The firm also said Penguin's financial profile is expected to improve after a transitional fiscal 2026, supported by a higher-quality business mix.

Meanwhile, Stifel increased its price target to $75 from $66, while keeping a ‘Buy’ rating. The firm said Penguin's stronger-than-expected fiscal third-quarter results were driven by better-than-expected performance in its memory business.

Stifel added that its confidence in the company's growth is supported by an improved fiscal 2026 outlook and early expectations for continued momentum in fiscal 2027, driven by sustained memory demand and the expansion of Penguin's AI factory platform.

Seeing Strong AI-Driven Demand for Memory, Says PENG CEO

Penguin Solutions reported record fiscal third-quarter results, with revenue surging 48% year-on-year to $479 million, while earnings per share (EPS) came in at $0.84.

According to Fiscal.ai data, Wall Street expected Penguin Solutions to report EPS of $0.56 on revenue of $421 million.

CEO Kash Shaikh said the performance reflected accelerating demand across Penguin's AI Factory Platform, with Integrated Memory revenue more than doubling from a year earlier and AI infrastructure continuing to gain traction.

“We are seeing very strong AI-driven customer demand for memory and AI infrastructure solutions. As inference and agentic AI workloads become more persistent and context-rich, memory is increasingly becoming one of the primary performance and scalability bottlenecks,” he added.

Penguin raised its fiscal 2026 guidance for the second consecutive quarter to reflect this momentum, saying it now expects 22% YoY revenue growth, plus or minus 2%. It raised the EPS forecast to $2.6 from $2.15, plus or minus $0.05.

What Retail Traders Think Of PENG Stock

Retail sentiment on Stocktwits around Penguin Solutions trended in the ‘extremely bullish’ territory, with message volumes at ‘extremely high’ levels at the time of writing.

PENG stock is up 221% year-to-date and 199% over the past 12 months. The iShares Core S&P Small-Cap ETF (IJR) is up 31% over the past 12 months, while the iShares Russell 2000 ETF (IWM) is up 35%.

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