By Laurie Chen
BANGALORE/BEIJING, Aug 13 (Reuters) - China's Lenovo Group reported a 43% jump in quarterly revenue on Thursday, beating forecasts to drive shares up as much as 22%, as the world's largest computer maker rides an AI hardware boom and benefits from a global memory chip shortage.
Lenovo's revenue rose to $26.94 billion in the three months ended June 30, beating analyst expectations of $22.3 billion, as the consumer electronics hardware giant benefited from artificial intelligence-driven
demand and solid PC sales.
It was the group's highest quarterly revenue growth in the last five years, as AI-related revenue grew 60% on the year to $9.3 billion, making up 35% of total revenue in its fiscal first quarter.
SUCCESSFULLY TACKLED SUPPLY SHORTAGES, COST INCREASES
"We accurately anticipated supply shortages and cost increases (of memory chips), and addressed it successfully," Chief Executive Yang Yuanqing told Reuters.
He attributed the success to the firm's scale, resilient global supply chains and diversified memory supply from China, South Korea and the United States.
"I'm very confident in sustaining this growth momentum and driving long term profitability," he said, adding that Lenovo is on track to reach revenue of $100 billion this fiscal year.
The company swung to a net loss attributable to shareholders of $609 million from a profit of $505 million last year, compared to the average analyst estimate of $589 million profit, according to data compiled by LSEG.
The company said the loss was primarily due to a non-cash fair value loss of $1.7 billion arising from the revaluation of warrants issued in 2025.
Its AI server pipeline reached $54.0 billion, up 157% quarter-over-quarter, reflecting demand from hyperscalers, AI cloud and enterprise AI clients, it said in the earnings report.
"It's clear that we are becoming a global AI infrastructure leader as well," Yang said, adding that he believed Lenovo can maintain its AI-led growth momentum this year.
Lenovo's shares hit an all-time high on Thursday before the results announcement, taking year-to-date gains to 225%.
COMPETITORS HAVE RAISED PRICES THIS YEAR
U.S. competitors Dell, Hewlett Packard and Super Micro have been some of Wall Street's best performers this year but have raised prices by 10% to 30% due to soaring costs of NAND and DRAM memory chips.
Lenovo's PC, tablet and smartphone division, which accounted for about 64% of total revenue, reported a 27% year-on-year increase in revenue during the period.
Global PC shipments declined by 2% year-on-year in the second quarter of 2026 to 16.6 million units for the first time since the first quarter of 2025 due to memory-driven cost pressures, according to Counterpoint Research.
Lenovo retained its market lead in the second quarter, for a market share of 25.6%.
"We believe this will still be the trend in the second half of this year," Yang said in response to the decline in unit shipments, adding that the firm is growing sales of non-PC devices such as tablets.
Lenovo has raised PC prices twice this year to mitigate the impact of soaring memory costs.
"From a unit point of view, (PC) demand will be constrained, but because every average selling price is going higher or we are shifting to a premier price band, that helps us drive revenue growth."
He said the company was developing more powerful AI-enabled PCs and edge computing devices that can run AI models as global demand increases for personal AI devices.
Adjusted net income, which excludes one-off items and non-cash charges, more than doubled to $1.075 billion. R&D expenses jumped 30% year-on-year, the company said.
(Reporting by Laurie Chen and Sneha Kumar; Editing by Jacqueline Wong, Kate Mayberry and Clarence Fernandez)
