Photorealistic AI data center representing Penguin Solutions’ enterprise AI infrastructure growth and undervalued stock rebound potential.

Penguin Solutions is emerging as a deep-value AI play with developing tailwinds.

A full-stack offering and product launches point to accelerating business in 2026.

**Analysts and institutions provide support while pointing to a 30% stock price increase. **

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Penguin Solutions (NASDAQ: PENG) could be the deep value AI play you’ve been looking for. It’s currently trading at pennies on the dollar relative to long-term forecasts—forecasts that may be overly cautious.

Penguin Solutions provides end-to-end, full-stack, enterprise-quality, scalable AI solutions spanning hardware, software, and services.

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To put it simply, it puts the pieces of AI infrastructure together, enabling fast, easy deployment of AI factories. AI factories are the future, as modelers and applications suppliers shift from training to inference.

Among the catalysts for this stock in 2026 are the ongoing global expansion of AI infrastructure, product rollouts, business diversification, and margin improvement.

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Product rollouts will center on soon-to-be-released technologies from NVIDIA (NASDAQ: NVDA), Advanced Micro Devices (NASDAQ: AMD), and Dell Technologies (NYSE: DELL), while business will continue expanding to include a wider range of enterprises beyond hyperscalers. The company’s core products are OriginAI, a portfolio of pre-validated factory-quality AI solutions, and ICE ClusterWare management software.

Regarding value, this stock trades at only 10X its current-year earnings and approximately 5X the 2030 forecast, which is likely low, suggesting this market could advance by 100% to 400% or more over the coming years.

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Penguin Solutions had a solid Q1 for its fiscal 2026, highlighting the opportunities ahead. Its $343 million in net revenue was up 1% from last year, and outperformed expectations due to strength in the memory segment. Integrated Memory solutions, critical to AI deployment, increased by 41%, offsetting a double-digit decline in Advanced Computing and LED.

Margin news was also good. The company experienced gross margin compression, but offset it with operational quality. Operating income expanded by 13% despite a 70 basis point contraction in gross margin and is expected to strengthen as the year progresses. The bottom line, 49 cents in adjusted earnings, is flat compared to the prior year but more than 1000 basis points better than expected, and is compounded by improved guidance.