China's Lenovo Group reported a 43% jump in quarterly revenue on Thursday, beating forecasts and sending shares of the world's largest computer maker surging, as it rides an AI hardware boom and reaps the benefits of 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% year-on-year to $9.3 billion, accounting for 35% of total revenue in its fiscal first quarter.
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 US$1.7 billion arising from the revaluation of warrants issued in 2025.
Lenovo's shares hit an all-time high on Thursday before the results announcement, bringing its year-to-date gains to 225%. The shares surged as much as 17% after the results announcement. Its 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 NAND and DRAM memory chip costs.
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.
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.
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 Q1 2025 due to memory-driven cost pressures, according to Counterpoint Research.
Lenovo retained its market lead in the second quarter, giving it a market share of 25.6%.
Its AI server pipeline reached $54.0 billion, up 157% quarter-over-quarter, reflecting demand from hyperscalers, AI cloud and enterprise AI clients, its earnings report said.
Lenovo's strong performance comes after the company warned earlier this year of pressure on PC shipments as the industry grapples with a memory chip shortage that is getting more severe. It has also raised PC prices to mitigate the impact of soaring memory costs.
(Reporting by Laurie Chen and Sneha Kumar; Editing by Jacqueline Wong and Kate Mayberry)
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