Lenovo Group reported a strong increase in first-quarter revenue on Thursday, driven by surging demand for artificial intelligence infrastructure, servers and AI-enabled devices. The results pushed the company’s Hong Kong-listed shares to an all-time high.
Revenue for the three months ended June 30 climbed 43% year-on-year to a record $26.9 billion.
Adjusted profit attributable to shareholders increased even more sharply, rising 176% to $1.075 billion. This marked the first time Lenovo’s adjusted quarterly profit exceeded the $1 billion level.
AI Revenue Becomes a Major Growth Driver
Artificial intelligence is becoming an increasingly important part of Lenovo’s business.
The company said AI-related revenue surged 60% from a year earlier and represented approximately 35% of total group revenue during the quarter.
The strong performance highlights growing demand for AI infrastructure and computing products as businesses continue investing in artificial intelligence technology.
Lenovo Shares Reach Record High
Investors responded positively to the earnings report.
Lenovo shares listed in Hong Kong jumped as much as 7.6% to a record HK$31.26 during Thursday’s session.
By 05:05 GMT, the stock remained up around 3.4% at HK$30.02.
The record share price reflected increased optimism surrounding Lenovo’s exposure to the global AI investment boom.
Infrastructure Business Nearly Doubles Revenue
Lenovo’s Infrastructure Solutions Group delivered particularly strong growth during the quarter.
Revenue from the division nearly doubled to $8.5 billion, while its operating margin expanded to 9.1%.
The company’s AI server pipeline also grew significantly, reaching $54 billion.
That represented an increase of 157% from the previous quarter, providing further evidence of strong demand for Lenovo’s AI computing infrastructure.
PCs and Smartphones Continue to Grow
Lenovo’s Intelligent Devices Group, which includes personal computers and smartphones, generated revenue of $17.1 billion.
That represented a 27% year-on-year increase.
The performance suggests that Lenovo’s traditional hardware operations are also benefiting from stronger demand as manufacturers increasingly integrate AI capabilities into consumer and business devices.
Solutions and Services Revenue Rises 28%
Lenovo’s Solutions and Services Group also recorded solid growth.
Revenue from the division increased 28% to $2.9 billion, adding another source of expansion beyond the company’s hardware businesses.
The growth of Lenovo’s services operations is important to its broader strategy of increasing recurring revenue and improving profitability over the long term.
Warrant Revaluation Pushes Lenovo Into Net Loss
Despite the strong operating performance, Lenovo reported a net loss of $609 million for the quarter.
That compared with a $505 million profit during the same period a year earlier.
The loss was mainly caused by a $1.69 billion non-cash charge related to the revaluation of warrants, rather than a deterioration in the company’s underlying business performance.
Adjusted earnings therefore provided a more positive picture of Lenovo’s operating results.
Lenovo Targets Long-Term Margin Expansion
Looking ahead, Lenovo said it remains focused on delivering sustained margin growth through its Hybrid AI strategy.
The company acknowledged ongoing pressure from component supply conditions. However, management believes Lenovo’s global scale, resilient supply chain and expanding AI product portfolio should support continued profitable growth.
With AI-related revenue growing rapidly and its server pipeline reaching record levels, Lenovo is positioning artificial intelligence as a central part of its long-term growth strategy.
