$PENG A New X Favorite. Does it have legs?

Gaetano · Gaetano · May 14, 2026 at 10:02 · ⏱ 17 min read  | Read on Substack ↗
Summary
Penguin Solutions is positioned to benefit from the AI inference era's memory bottleneck, leveraging its integrated memory (SMART Modular) and advanced computing businesses with CXL/MemoryAI products and a photonic memory appliance partnership with Marvell. The author is long and sees the stock as a potential rerating from a 1.7x sales memory/systems comp to a 2-3x AI memory infrastructure multiple if CXL and PMA scale.
  • •Penguin's Q2 FY26 revenue was $343M, down 6% YoY, but Integrated Memory revenue grew 63% YoY to $172M (50% of total), while Advanced Computing fell 42% to $116M.
  • •FY26 guidance: total revenue growth ~12%, but Advanced Computing guided down 15-25%, memory up 65-75%, LED down 5-15%; gross margin lowered to 28% due to higher memory mix.
  • •Non-hyperscale AI and HPC revenue grew 50% YoY in H1 and now represents >40% of Advanced Computing revenue, showing enterprise/sovereign shift.
  • •Penguin's MemoryAI KV cache server supports up to 11TB CXL-based memory and has received real orders: a substantial CXL card order from a GenAI company and CXL-powered KV cache servers sold to a tier-1 financial institution.
  • •Penguin is developing a Photonic Memory Appliance (PMA) in partnership with Celestial AI (now inside Marvell), aiming to optically pool memory for AI systems.
  • •SK Telecom invested $200M and signed a collaboration agreement with Penguin, adding SK hynix memory access and a sovereign AI channel (South Korea's Haein AI factory).
  • •Management views NVIDIA's AI factory designs as complementary, not competitive, positioning Penguin as an integrator and memory-infrastructure layer.
  • •The author values PENG at ~$48 / $2.6B market cap, 1.7x forward sales and ~22x guided EPS, and sees potential for rerating to 2-3x sales if CXL/MemoryAI become larger product lines.
Read time 17 min
Length 17,309 chars
Category finance
Trade Ideas
Gaetano Substack author, Gaetano
Author believes Penguin Solutions is transitioning from a memory/systems company to an AI inference memory infrastructure platform, with CXL and MemoryAI as near-term proof points and PMA as a long-te
Author believes Penguin Solutions is transitioning from a memory/systems company to an AI inference memory infrastructure platform, with CXL and MemoryAI as near-term proof points and PMA as a long-term moonshot.
PENG HIGH
Gaetano Substack author, Gaetano
Marvell acquired Celestial AI, which Penguin partnered with for photonic memory (PMA). The article states 'Marvell acquired Celestial, which validates the importance of optical connectivity inside nex
Marvell acquired Celestial AI, which Penguin partnered with for photonic memory (PMA). The article states 'Marvell acquired Celestial, which validates the importance of optical connectivity inside next-generation AI systems' and expects Penguin's PMA work to continue with Marvell, giving MRVL a potential new system-level partner. Risk: PMA is still developmental; Marvell's investment may not yield near-term revenue.
MRVL
Gaetano Substack author, Gaetano
SK hynix is directly named as a strategic partner via the SK Telecom collaboration, providing memory access. The article quotes management saying the relationship 'can help with access, and access to
SK hynix is directly named as a strategic partner via the SK Telecom collaboration, providing memory access. The article quotes management saying the relationship 'can help with access, and access to memory is becoming more important as AI systems scale,' implying SK hynix benefits from Penguin's growing memory-integrated AI infrastructure. Risk: Memory cyclicality and pricing pressure could offset volume gains.
000660.KS
Gaetano Substack author, Gaetano
The article positions Penguin's AI factory platform as complementary to NVIDIA's reference designs, and the inference era (memory-bound workloads) should drive broader demand for NVIDIA GPUs as enterp
The article positions Penguin's AI factory platform as complementary to NVIDIA's reference designs, and the inference era (memory-bound workloads) should drive broader demand for NVIDIA GPUs as enterprises deploy AI. Management views NVIDIA as an advantage, not a threat, and Penguin benefits from helping customers turn GPU capacity into production systems. Risk: If Penguin's CXL memory solutions reduce GPU memory dependency, it could slightly alter NVIDIA's value proposition, but overall inference demand tailwind dominates.
NVDA
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This newsletter, published May 14, 2026, features Gaetano discussing PENG, MRVL, 000660.KS, NVDA. 4 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Gaetano  · Tickers: PENG, MRVL, 000660.KS, NVDA