Lenovo quarterly revenue exceeds expectations, benefiting from AI server business and pre-purchasing before storage chip price increases

Lenovo Group's revenue exceeded expectations last quarter, driven by advanced purchases prompted by anticipated storage chip price increases, as well as strong performance in its artificial intelligence (AI) server business.

Lenovo reported a quarterly revenue growth of 18% to $22.2 billion as of the end of last year, surpassing analysts’ average estimate of $20.8 billion. However, net profit fell by 21% year-on-year.

Data from consulting firm IDC shows that overall personal computer (PC) market shipments grew by 9.6% last quarter, with Lenovo, HP, and Dell all recording double-digit shipment growth.

Holiday promotions and advanced purchases prompted by price hike expectations are boosting the PC industry. The AI boom has led to tight supplies of consumer electronics components such as storage chips. While industry giants have more negotiating power to secure priority supplies, this global supply shortage is expected to further impact profit margins in the coming months.

Analysts at UOB Kay Hian noted in a report: “We expect this advanced demand release to continue into the first quarter, but as low-cost inventory is depleted in Q1, further price increases may occur in the future, and could eventually affect end-user demand.”

Thanks to the AI infrastructure investment boom, Lenovo’s Infrastructure Solutions Group, responsible for servers and storage hardware, saw quarterly revenue grow by 31% to $5.2 billion, marking a record high.

Editor: Wang Yongsheng