Lenovo Group posted a stronger-than-expected quarterly performance, reporting a 27% rise in revenue for its fiscal fourth quarter to $21.6 billion. The result surpassed analysts' expectations of $18.7 billion and coincided with a sharp rally in the company's stock, which climbed 15% and was the largest percentage gainer on the Hang Seng Index on the day.
The company's largest revenue contributor, its PC, tablet and smartphone division, recorded a 24% increase in revenue in the quarter ended March - the segment's best quarterly growth rate in five years. Management said that consumer demand for personal computers strengthened as buyers moved ahead of potential price hikes, helping Lenovo expand its share of the market.
Lenovo cautioned earlier this year about challenges to PC shipments amid an intensifying memory chip shortage. To counter rising input costs, the company has raised PC prices. "Supply (of memory chips) is in heavy shortage, and the cost is growing faster," Lenovo CEO Yang Yuanqing said, adding that a more diversified supplier base - which includes Chinese producers - helped the firm manage the impact.
China's leading memory chip manufacturer, ChangXin Memory Technologies, identified Lenovo as one of its major customers in a prospectus filed this month. ChangXin reported a more than 700% jump in first-quarter revenue, a move that the company attributed to a surge in memory chip prices. Memory prices doubled in the first quarter compared with the prior period and are forecast to climb up to 63% in the current quarter amid strong demand from artificial intelligence data centres, which has tightened supplies for smartphones, laptops and automobiles.
On the shipment front, Lenovo said its PC shipment growth outpaced the overall market by nearly six percentage points in the quarter. Industry data cited by the company showed global PC shipments rose 3.2% in the first quarter of 2026 to 63.3 million units, while Lenovo's shipments increased 9% to 16.5 million units, giving it a 26% market share according to Counterpoint Research.
Lenovo's infrastructure business - the Infrastructure Solutions Group, which includes its AI server operations - was the fastest-growing segment in the quarter, posting 37% revenue growth. The group is accelerating its push into the AI inference market; Lenovo said its AI server order pipeline has reached $21 billion.
Profitability improved markedly. Net profit attributable to shareholders rose 479% to $521 million in the quarter, exceeding analysts' expectations of $271 million compiled by LSEG.
The company has been responding to the dual pressures of surging memory costs and constrained supply by diversifying suppliers and implementing price increases on its PCs. Those moves, combined with stronger-than-expected consumer demand, underpinned the quarter's results and the sharp positive reaction in the market.
Context and implications
The quarterly report highlights two concurrent themes: resilient consumer demand for PCs in the face of rising component prices, and a rapid expansion of Lenovo's AI infrastructure ambitions. The revenue and profit beat reflected both higher volumes and pricing actions, while growth in the Infrastructure Solutions Group signals the company's intent to capitalise on demand for AI servers.
At the same time, the company and its suppliers have disclosed that memory chip shortages and steep price increases are reshaping cost structures for devices across several end markets including smartphones, laptops and automobiles.