The world’s largest PC maker said fourth-quarter revenue rose 27% to $21.6 billion for the period ended March, beating analysts’ expectations of $18.7 billion. Profit attributable to shareholders climbed 479% to $521 million, above forecasts of $271 million.

Its shares jumped 15% on Friday, making it the biggest gainer on Hong Kong’s Hang Seng Index.

Lenovo’s biggest business unit, which covers PCs, tablets and smartphones, recorded a 24% increase in revenue. The company said it was the division’s strongest quarterly growth in five years.

The results came as PC makers are currently dealing with high memory prices and supply shortages. Lenovo had earlier warned that the shortage could affect shipments across the industry. The company has also raised prices on some PCs to manage higher component costs.

“Supply (of memory chips) is in heavy shortage, and the cost is growing faster,” Lenovo Chief Executive Officer Yang Yuanqing told Reuters on Friday.

He added that Lenovo’s wider supplier network, including Chinese memory chip producers, helped reduce pressure on the business.

Chinese memory chipmaker ChangXin Memory Technologies recently identified Lenovo as one of its major customers in a prospectus filing. The chipmaker also reported more than 700% growth in first-quarter revenue as memory prices surged.

According to forecasts, memory chip prices doubled in the first quarter and could rise by as much as 63% this quarter. Demand from data centres has tightened supply for laptops, smartphones and cars.

Lenovo said its PC shipment growth outpaced the market by nearly six percentage points during the quarter. Research firm Counterpoint Research said global PC shipments rose 3.2% in the first quarter to 63.3 million units, while Lenovo’s shipments increased 9% to 16.5 million units. That gave the company a 26% share of the global market.

The company is also expanding its server business. Lenovo said its infrastructure solutions group, which includes its server operations, posted 37% revenue growth in the quarter, the fastest among all its business units.

It added that its server order pipeline had reached $21 billion as demand for data centre equipment continued to grow.

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.