Lenovo has had an exceptionally strong first quarter. The Chinese manufacturer’s revenue rose 43 percent to $26.94 billion. Sales of AI infrastructure, in particular, are growing rapidly. The pipeline for AI servers now stands at $54 billion.
This revenue growth is the highest Lenovo has recorded in five years and is well above the $22.3 billion analysts had projected, according to Reuters. AI-related activities generated $9.3 billion, a 60 percent increase from a year ago. As a result, 35 percent of Lenovo’s revenue now comes from products and services linked to AI.
Traditional hardware operations also continue to grow. The division for PCs, tablets, and smartphones, which accounts for nearly two-thirds of Lenovo’s revenue, grew by 27 percent. With a market share of 25.6 percent, Lenovo also remained the world’s largest PC vendor.
AI servers in high demand
The most striking growth is in AI servers. Lenovo reports an order pipeline worth $54 billion, a 157 percent increase from the previous quarter. According to the company, demand is coming from hyperscalers, AI cloud providers, and enterprises building their own AI infrastructure.
This trend is helping Lenovo at a time when the broader hardware market is struggling with sharply rising memory prices. NAND and DRAM chips have become more expensive due to shortages. As a result, Lenovo, like several of its competitors, has raised PC prices.
According to Counterpoint Research, the global PC market contracted in the second quarter for the first time since early 2025. Shipments fell by 2 percent to 16.6 million systems.
Accounting setback
On paper, the strong revenue growth did not translate into net income. Lenovo reported a loss of $609 million, compared to a profit of $505 million a year earlier. This was primarily due to a non-cash accounting loss of $1.7 billion resulting from the revaluation of warrants issued in 2025.
Excluding such non-recurring items, the picture looks different. Adjusted net income more than doubled to $1.075 billion. Lenovo is also investing more in technology: R&D spending was 30 percent higher than a year ago.
Investors reacted positively to the figures. The stock reached a record high on Thursday and, following the release of the results, rose another 17 percent at one point. Since the beginning of the year, the stock price has surged 225 percent.