Lenovo Group has reported a 20% increase in quarterly revenue, reaching $18.8 billion. This surpassed analysts’ estimates of $17.9 billion.
The surge was driven by strong demand for AI-powered computing infrastructure, helping the company offset current challenges in the global PC market.
Net profit more than doubled to $692.7 million for the December quarter, although a substantial portion—$282 million—came from deferred tax credits.
Lenovo is capitalising on the growing demand for artificial intelligence by incorporating DeepSeek’s cutting-edge AI models into its products, including PCs and tablets.
The Chinese startup has gained attention for providing AI models with high inferencing efficiency and lower computational costs, making AI adoption more accessible.
“DeepSeek has improved AI efficiency. The new models with a high inferencing efficiency and low computing power costs will democratise access to AI,” Lenovo CEO Yang Yuanqing stated during an interview with Reuters.
The company anticipates that AI-enabled PCs will make up 25% of its total shipments by 2025, potentially growing to 80% by 2027. This transition is expected to drive further demand for GPU servers, which are important for AI applications.
Infrastructure and Enterprise Segments Show Strong Growth
Lenovo’s infrastructure solutions division, which includes its AI server business, posted a 59% revenue increase, pointing to the thriving reliance on AI-driven computing. The solutions and services group, which provides enterprise cloud-based software, also saw a 12% rise in revenue, reaching $2.3 billion.
Even with its progress in AI, Lenovo is still competing well in the PC market. Its intelligent devices division, encompassing PCs, smartphones, and tablets, recorded a 12% revenue gain, showing a steady commercial PC replacement cycle.
Following the earnings report, Lenovo’s Hong Kong-listed shares initially surged but later declined by over 4%. However, the company’s stock has gained 17% this year, largely driven by investor optimism over its AI advancements and strategic partnerships with firms like DeepSeek.
Beyond PCs, Lenovo’s non-PC businesses now account for 46% of total revenue, with expansion into AI-powered computing solutions strengthening its competitiveness in AI-driven infrastructure.
