Lenovo Reports 20% Revenue Growth Thanks to AI Boom, PC Sales Growth

Lenovo’s calendar shows the third quarter of its current fiscal year ending on December 31, which was characterized by revenue growth of 20% to $18.8 billion for the world’s largest PC maker. Analysts’ expectations were about $1 billion lower, but that didn’t stop Lenovo shares from falling 4% in Hong Kong trading after the report was published.

Image source: Lenovo

For several quarters in a row, the stock market has been trying to bet on artificial intelligence technologies implemented in client PCs by developers of specialized software and central processors. Computers compatible with such solutions remain quite expensive, and customers do not quite understand what benefits expensive innovations can bring in less than favorable macroeconomic conditions. It should be noted that such pessimism of some third-party experts does not prevent Lenovo management from counting on an increase in PC sales by more than 10% by the end of the current year. The company has already implemented DeepSeek AI solutions in its computers and tablets, launching integration through the proprietary XiaoTen assistant.

Lenovo’s net profit nearly doubled to $692.7 million last quarter, but a one-time tax deduction of $282 million contributed to this growth, so the growth was not entirely due to market factors. After Donald Trump came to power in the United States with his aggressive approach to increasing customs tariffs, it is not so easy to predict the further dynamics of the global PC market.

However, in the last quarter, according to IDC data, Lenovo increased its PC shipments year-on-year from 16.1 to 16.9 million units. At the same time, its competitor HP Inc. saw them fall from 14 to 13.7 million units, and Dell was marking time with 9.9 million PCs. Chinese Lenovo controlled 24.5% of the global market for finished computers by the end of the fourth calendar quarter. At the same time, the global volume of PC shipments in the past quarter grew by only 1.8%.

Lenovo’s infrastructure business, which includes servers, increased its revenue by 59% year-on-year in the quarter. The services business, which covers solutions for corporate clients and cloud software, was able to increase revenue by 12%. All this indicates that demand for AI solutions in the corporate market is growing at a steady pace.