Penguin Solutions, which reported earnings after the U.S. market closed yesterday, took the opposite route today: the underlying stock first rose 4% in after-hours trading on Tuesday, then surged as much as 7% intraday today to $68.90. Binance’s $PENG stock perpetual contract had already climbed above $69 last night—trading 24/7 and tracking the share price, but not equivalent to buying or selling the underlying stock itself—effectively pricing in the earnings sentiment ahead of time. Now that the underlying stock has caught up with the contract and the spread has closed, this pricing battle is basically over.
Here’s why the fundamentals justify the move: Q4 revenue came in at $567 million, up 68% year over year and well above market expectations of around $520 million. Non-GAAP EPS was $1, versus expectations of just $0.77. Even more striking was the guidance: the midpoint of its FY2027 revenue outlook came in at $2.43 billion, more than $200 million above the preliminary outlook it gave last quarter. Orders provide even firmer support: a leading AI lab signed a $10 billion contract for computing capacity, with Penguin Solutions set to deploy and operate a 36,000-GPU cluster in Norway. Deals like this generate cash flow through annual deliveries.
One detail that’s easy to overlook: the company also completed a $750 million convertible note offering with a 0% coupon. Strong investor demand suggests that capital is willing to back AI infrastructure at zero interest; but issuing debt to expand capacity also means trading future dilution for production capacity today. During earnings season, this kind of “blowout results + leveraged expansion” combination has a clear direction, but also brings high volatility, so keeping positions small is prudent.
Here’s why the fundamentals justify the move: Q4 revenue came in at $567 million, up 68% year over year and well above market expectations of around $520 million. Non-GAAP EPS was $1, versus expectations of just $0.77. Even more striking was the guidance: the midpoint of its FY2027 revenue outlook came in at $2.43 billion, more than $200 million above the preliminary outlook it gave last quarter. Orders provide even firmer support: a leading AI lab signed a $10 billion contract for computing capacity, with Penguin Solutions set to deploy and operate a 36,000-GPU cluster in Norway. Deals like this generate cash flow through annual deliveries.
One detail that’s easy to overlook: the company also completed a $750 million convertible note offering with a 0% coupon. Strong investor demand suggests that capital is willing to back AI infrastructure at zero interest; but issuing debt to expand capacity also means trading future dilution for production capacity today. During earnings season, this kind of “blowout results + leveraged expansion” combination has a clear direction, but also brings high volatility, so keeping positions small is prudent.