Penguin Solutions, Inc. (NASDAQ: PENG) saw its stock plummet 5.21% in early trading on Thursday, despite reporting better-than-expected second-quarter results and raising its full-year guidance. The sharp decline comes as the broader market, particularly the tech sector, faces intense selling pressure following President Donald Trump's announcement of sweeping tariffs on major trade partners.

On Wednesday after market close, Penguin Solutions posted strong Q2 earnings that exceeded Wall Street estimates. The company also raised its fiscal year 2025 outlook, projecting net sales growth of 17% year-over-year (+/-3%) and adjusted EPS of $1.60 (+/- $0.10). This positive news initially drove the stock up 4.6% in after-hours trading.

However, the optimism surrounding Penguin Solutions' performance was quickly overshadowed by macro concerns. President Trump's announcement of at least 10% tariffs on all US imports, with higher duties targeting about 60 nations, has sparked fears of an all-out trade war. The tech sector, in particular, is facing significant pressure, with major players like Apple, Amazon, and Nvidia all experiencing substantial pre-market declines. As a provider of solutions for the computing, memory, and LED markets, Penguin Solutions appears to be caught in the crossfire of these broader market dynamics, despite its strong fundamentals.