Lenovo Revenue Hits 43% Record on AI Hardware Boom
China’s Lenovo Group reported a 43% increase in quarterly revenue on Thursday, surpassing forecasts and propelling shares up as much as 22%. The world’s largest computer maker is capitalising on an AI hardware boom while also benefiting from a global memory chip shortage. Lenovo’s revenue increased to $26.94 billion for the quarter ending June 30, surpassing analyst projections of $22.3 billion. This growth can be attributed to heightened demand driven by artificial intelligence and robust sales in the PC segment. It marked the group’s most significant quarterly revenue growth in the past five years, with AI-related revenue surging 60% year-over-year to $9.3 billion, constituting 35% of total revenue in its fiscal first quarter. “We accurately anticipated supply shortages and cost increases (of memory chips), and addressed it successfully,” Chief Executive Yang Yuanqing told. He attributed the success to the firm’s scale, resilient global supply chains, and diversified memory supply from China, South Korea, and the United States. “I’m very confident in sustaining this growth momentum and driving long term profitability,” he said, adding that Lenovo is on track to reach revenue of $100 billion this fiscal year.
The company reported a net loss attributable to shareholders of $609 million, a significant decline from the profit of $505 million recorded last year. This outcome contrasts with the average analyst estimate of a $589 million profit, as per data compiled by LSEG. The company stated that the loss was chiefly attributable to a non-cash fair value loss of $1.7 billion resulting from the revaluation of warrants issued in 2025. Its AI server pipeline reached $54.0 billion, up 157% quarter-over-quarter, reflecting demand from hyperscalers, AI cloud, and enterprise AI clients, as stated in the earnings report. “It’s clear that we are becoming a global AI infrastructure leader as well,” Yang said, adding that he believed Lenovo can maintain its AI-led growth momentum this year. Lenovo’s shares reached a record peak on Thursday ahead of the results announcement, bringing year-to-date gains to 225%.
Competitors have increased their pricing this year. US competitors Dell, Hewlett Packard, and Super Micro have been among the top performers this year, yet they have increased prices by 10% to 30% in response to the rising costs of NAND and DRAM memory chips. Lenovo’s division encompassing PCs, tablets, and smartphones, which constituted approximately 64% of total revenue, experienced a 27% year-on-year revenue increase during the period. Global PC shipments experienced a year-on-year decline of 2% in the second quarter of 2026, totalling 16.6 million units. This marks the first decrease since the first quarter of 2025, attributed to cost pressures driven by memory constraints, as reported. Lenovo maintained its position as the market leader in the second quarter, achieving a market share of 25.6%. “We believe this will still be the trend in the second half of this year,” Yang said in response to the decline in unit shipments, adding that the firm is growing sales of non-PC devices such as tablets.
Lenovo has implemented two price increases for PCs this year in response to escalating memory costs. “From a unit point of view, (PC) demand will be constrained, but because every average selling price is going higher or we are shifting to a premier price band, that helps us drive revenue growth.” He stated that the company was advancing the development of more powerful AI-enabled PCs and edge computing devices capable of running AI models, in response to the rising global demand for personal AI devices. Adjusted net income, excluding one-off items and non-cash charges, increased more than twofold to $1.075 billion. R&D expenses increased by 30% compared to the previous year, according to the company’s statement.
