Lenovo Stock Surges 18% to Record High as Profit Jumps Nearly Fivefold

TLDR

• Lenovo stock jumped 18% on Tuesday to a record HK$18.7, extending a 20% gain from Friday after earnings
• Quarterly revenue rose 27% to $21.6 billion — the company’s strongest growth in five years
• Net profit surged 479% to $521 million, nearly double analyst expectations
• AI-related revenue jumped 105% for the full year and made up 38% of total quarterly revenue
• DBS raised its price target to HK$23.50 from HK$19.00

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Lenovo stock hit an all-time high on Tuesday after the PC giant delivered quarterly results that blew past expectations on nearly every line.

Lenovo Group Limited, LNVGY

The Hong Kong-listed stock climbed 18% to HK$18.7, adding to a 20% jump on Friday when the results first dropped. That’s a combined move of roughly 38% in two trading sessions.

Revenue for the March quarter came in at $21.6 billion, up 27% year-over-year. Net profit surged 479% to $521 million, well above the $291 million analysts had expected, according to FactSet.

For the full fiscal year, Lenovo posted $83.1 billion in total revenue. The company is now targeting $100 billion in annual revenue within the next two years.

AI-related revenue grew 105% over the year and accounted for one-third of total group revenue. In the latest quarter alone, AI businesses made up 38% of total revenue.

AI Server Business Drives the Gains

Lenovo’s infrastructure solutions segment — which covers AI servers and data-center products — grew revenue by 37%, making it the fastest-growing part of the business.

Morningstar analyst Jing Jie Yu pointed to Lenovo’s ties with chipmakers as a key advantage, helping the company maintain access to components while supply chains remain tight.

“Customers are racing to bring AI infrastructure online and will pay more to secure Lenovo’s ability to coordinate complex supply chains in server manufacturing,” Yu said.

Morningstar expects the infrastructure segment to grow another 35% in fiscal 2027.

DBS analyst Jim Au said the latest results made a strong case for viewing Lenovo as an AI infrastructure company rather than just a PC maker.

“Lenovo has now demonstrated that its AI infrastructure growth can convert into profit,” Au said.

DBS raised its price target on Lenovo to HK$23.50 from HK$19.00. The stock had last closed at HK$15.75 before Friday’s jump.

PC Business Holds Steady

Lenovo’s core PC, tablet, and smartphone division also held up. IDC data showed Lenovo held a 25% global PC market share in Q1 2026, keeping its position as the world’s top PC maker.

Premium PCs accounted for half of all shipments in the latest quarter, which helped margins.

Memory chip shortages remain a risk. The surge in AI-related demand has tightened supply and pushed up costs for manufacturers across the industry.

Morningstar’s Yu said Lenovo has managed to pass those rising costs on to customers better than expected, likely helped by its brand positioning in the premium segment.

Morningstar expects average PC prices to rise 25% in fiscal 2027 and a further 6% in fiscal 2028, though shipment volumes may dip as a result.

DBS expects Lenovo’s infrastructure group revenue growth to stay in the 30%–40% range while operating margins gradually approach the company’s long-term 5% target.

DBS had previously said the server business could achieve sustainable profitability from the current fiscal year as liquid cooling becomes standard in new AI data centers.