Lenovo Posts Record Revenue on Strong AI Demand — Update

By Sherry Qin

Lenovo Group reported record quarterly revenue as the world's largest PC maker continued to grow its consumer-electronics and infrastructure businesses, supported by AI adoption and replacement cycle tailwinds.

Revenue for the three months ended September rose 15% to $20.45 billion, exceeding a market consensus of $20 billion. Net profit fell 5% to $340 million, missing the $382 million expected in a FactSet poll of analysts. Excluding noncash and nonoperating effects, adjusted net profit increased 25% to $512 million, the company said.

Demand for artificial-intelligence products continued to drive growth for Lenovo, with AI-related sales accounting for 30% of total revenue in its second quarter, up from a 17% share a year earlier.

Lenovo's main business, the intelligent-devices segment that includes personal computers, smartphones and tablets, posted a 12% rise in revenue for the period. The global PC market has maintained strong momentum, helped by the Windows 11 transition.

The company ramped up sales of AI PCs, which made up one-third of its computer shipments in the September quarter. Lenovo grew its PC shipments by 17% in the July to September period to 19.4 million units, bringing its market share to 25.5%, according to IDC data.

However, the PC maker's results come as memory-chip prices are surging, hitting a whole host of companies, and could drag on its bottom line. Strong demand, driven by the AI boom, has led to a shortage in DRAM, used in processing devices such as computers and GPUs, causing prices to rise sharply.

With AI-related demand still robust, markets expect further rounds of memory-chip price increases through 2026, UOB analysts wrote in a note. The PC maker is unlikely to pass all its additional costs to consumers, they said.

In the latest quarter, revenue from the company's infrastructure-solutions business, which includes AI servers, climbed 24%. The segment remained in the red, however, which the company attributed to increased investments to scale AI capabilities and expand the AI infrastructure portfolio.

Analysts view Lenovo as well-positioned to ride China's AI infrastructure growth. The country's server market is estimated to reach over $140 billion by 2029, with Lenovo's share of the market exceeding 20% by 2028, according to DBS analyst Jim Au.

Shares in Lenovo rose on Thursday after the earnings release amid broad gains in Asian tech stocks, fueled by Nvidia's better-than-expected results overnight.

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

November 20, 2025 02:11 ET (07:11 GMT)