(Daniel Karmann/Getty Images)

A very boring company might be worth paying attention to

F5 is aiming its products at the surge of AI-related data center investment, and it’s working.

1/29/25 2:55PM

F5 Inc. is getting a moment in the sunshine, as the mind-numbingly boring “application services” company tops the S&P 500 list of performers on Wednesday.

The Seattle company, which has been around since the late 1990s tech boom, sells traffic management and security software that choreographs and combs through data pumping through the server systems that power the internet.

Of course, more recently F5 has been aiming their products at the surge of AI-related data center investment, which has had a healthy effect on the bottom line.

After beating expectations on both the top and bottom line in earnings results reported Tuesday, the company’s CEO, François Locoh-Donou, suggested that demand for the company’s services offerings looked to be relatively robust, even in light of uncertainty introduced by DeepSeek’s open-source models that set off a mini market panic on Monday.

“The stance of F5 is if, in fact, we can have more open-source models that allow more enterprises to adopt AI faster and build their applications and it creates a faster proliferation of AI applications, that is really good news for F5,” he said. “Because it means that we will have more opportunity to do high-performance data delivery for data stores and more opportunity to secure AI workloads. And if, in fact, it is cheaper to build and train these models than we thought it would be, that is also good news because it will accelerate adoption of AI.”

The market seems to have taken him at his word, and the stock isn’t getting the same scrutiny as Nvidia is on Wednesday, perhaps suggesting that investors don’t view its fate as specifically linked to the construction of additional data centers that DeepSeek might put on pause.

F5’s shares are up more than 11% on Wednesday, its third-biggest daily jump in the last decade. The stock is up roughly 25% in the last three months.

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AI server cluster maker Penguin Solutions takes flight

Small-cap AI server cluster maker Penguin Solutions surged Thursday after posting better-than-expected Q2 revenue and profit numbers Wednesday after the close, along with an increase in full-year sales and profit guidance.

The company, which was known as Smart Global Holdings until July 2024, has positioned itself as a provider of “end-to-end AI infrastructure solutions.”

Its Advanced Computing division designs and sells computers, cabling, and cooling systems, the server racks and clusters of racks AI data centers need. Its other main division sells flash and DRAM memory products.

It’s a pretty small company, with a fully diluted market cap of just over $1 billion and roughly 2,900 employees, according to FactSet.

The stock is volatile. Penguin dove during last year’s tariff tantrum that followed “Liberation Day” in April. Then it turned tail and doubled through early October amid a surge of call options activity, which tends to reflect retail interest. From the October peak, it then plunged by about 50%, before Thursday’s renaissance.

For what it’s worth, call options activity in Penguin is pretty busy today, too — relatively speaking — with roughly 2,625 traded as of 1:15 p.m. ET. That’s the most since early January, when the company last reported quarterly numbers. The average volume over the previous 25 trading sessions is about 325 calls a day, FactSet data shows.

Penguin Solutions Stock Takes Off On AI Bolstered Outlook

The company, which was known as Smart Global Holdings until July 2024, has positioned itself as a provider of “end-to-end AI infrastructure solutions.”

It’s a pretty small company, with a fully diluted market cap of just over $1 billion and roughly 2,900 employees, according to FactSet.

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Momentum returns to optics stocks as the release valve for AI optimism

Potentially imminent end to the war? Buy optics stocks.

Maybe not? Buy optics stocks anyway.

Effectively all the juice left in the AI trade is coming from optics (and memory) stocks. And the latter group is taking a bit of a breather today while the former continues to surge.

Shares of Ciena Corp., Lumentum, and Coherent are building on recent big gains and among the biggest gainers in the S&P 500 near midday, while Applied Optoelectronics is also surging on Thursday.

These companies all provide solutions that help information move around in data centers, and thus are key beneficiaries of the aggressive capex plans of hyperscalers. Nvidia has invested $2 billion apiece in Coherent and Lumentum in deals that also include purchase commitments.

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Space stocks rip during a topsy-turvy day for the equity market

Satellite-services-from-space stocks surged Thursday after reports that Amazon is in talks to buy Globalstar, which provides voice and connectivity services from its satellite network. It also can’t hurt that the general mood around space is ebullient, following the successful launch of Artemis II on Thursday.

Planet Labs and ViaSat also soared on the news.

The gains for EchoStar — seen as a backdoor play at pre-IPO SpaceX exposure — and Rocket Lab were more muted, perhaps because a deep-pocketed competitor like Jeff Bezos getting serious about space services could complicate the plans of the two largest commercial space launch companies.

Rocket Lab and SpaceX see launch services as key to their aspirations of being major providers of voice and data services from low-Earth orbit satellites.

Tesla CEO Elon Musk’s SpaceX is the dominant provider of such services, and the early rumors on the company’s planned IPO — expected to be the largest ever — suggest the market is very excited about the prospects for the industry.

Elsewhere in the space stock world, Intuitive Machines — a maker of space infrastructure that provides services to NASA for lunar missions — also rose.

Globalstar surges after FT reports that Amazon is in talks to buy the satellite group

Rocket Lab and SpaceX see launch services as key to their aspirations of being major providers of voice and data services from low-Earth orbit satellites.

Elsewhere in the space stock world, Intuitive Machines — a maker of space infrastructure that provides services to NASA for lunar missions — also rose.

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Can Sandisk do the double?

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Sandisk and energy stocks soared while software names sank amid a broad sell-off in tech stocks.

Balancing balls of different sizes on pink seesaws creating equilibrium