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Penguin Options may very well be a breakout participant within the increasing synthetic intelligence increase, in response to Goldman Sachs. The Wall Avenue funding financial institution on Friday initiated protection of the enterprise AI firm, which modified its title from SMART International Holdings final month , with a purchase score and a $21 per share worth goal. Goldman’s forecast implies roughly 40% upside from Thursday’s $15.05 shut. Penguin shares had pulled again greater than 20% in 2024 by Thursday, however are about 5.5% larger in early buying and selling Friday. PENG YTD mountain Penguin Options shares in 2024. Penguin designs and manufactures enterprise options for markets together with computing, reminiscence and light-emitting diode ( LED) lighting. Its advance computing section has publicity to AI and machine studying, as does its reminiscence sector. “PENG is properly positioned to handle the rising enterprise AI compute alternative by its Penguin Computing built-in answer, the place the corporate has 25 years of expertise designing, constructing, deploying and managing high-performance computing tasks,” Goldman analyst Michael Ng mentioned. Whereas Penguin’s LED and reminiscence companies are extra cyclical and thus face some drawbacks, Ng mentioned the potential development runway due to generative AI can greater than make up for any decline in income. “We’re inspired by PENG’s publicity to enterprise AI demand, which ought to assist drive PENG income to develop at a 13% 5-yr CAGR (F2024-29) and increase working margins, pushed by development in its compute enterprise and a restoration within the extra cyclical reminiscence and LED markets,” Ng added.
