Lenovo Stock Doubles in May as AI Revenue Hits 38% of Sales
In brief
- Lenovo stock surged 109% in May, best monthly performance since 1999
- AI-related revenue grew 84% year-on-year, now 38% of quarterly sales
- Infrastructure Solutions Group posted record $5.6 billion revenue, up 37% YoY
- Goldman Sachs more than doubled its price target on results
- CEO targets $100 billion annual revenue within two years
Record Earnings and Market Momentum
Lenovo's Q4 earnings showed quarterly revenue of $21.6 billion, up 27% year-on-year, with net profit hitting $521 million, up 479% from $90 million a year earlier. The Infrastructure Solutions Group, which sells servers to enterprises, posted record quarterly revenue of $5.6 billion, up 37% year-on-year.
Full-year revenue came in at $83.1 billion, up 20%—the first time the company has crossed the $80 billion mark. CEO Yuanqing Yang called FY2026 the best year in Lenovo's 40-year history, and set a target of $100 billion in annual revenue within two years.
The rally extended beyond May. Lenovo is now the top performer on the Hang Seng Index year-to-date, up 159%. Goldman Sachs more than doubled its price target on Lenovo following the results.
The AI Server Inflection
Demand for AI infrastructure is reshaping the hardware market. ISG enters FY2027 with an AI server pipeline exceeding $21 billion in committed demand, signaling sustained momentum ahead. The shift reflects a broader market dynamic: AI adoption is no longer confined to hyperscaler data centers.
"AI server growth is obviously a driver, with demand now spreading from hyperscalers to enterprise for AI inferencing demand, which benefits conventional server OEMs like Lenovo and Dell." — Bloomberg Intelligence analyst Steven Tseng
Lenovo's position in PCs remains dominant. The company holds a 24.4% global PC market share—the widest lead over its nearest rival in 15 years. But it's the server business that's capturing investor attention. The Intelligent Devices Group posted $14.6 billion in Q4 revenue, up 24% year-on-year, while ISG's growth rate outpaced it by a wide margin.
Rival Dell Technologies reported strong results on the same day, posting Q1 FY2027 revenue of $43.84 billion, up 88% year-on-year, and raising its full-year AI server revenue guidance to $60 billion. Dell's AI server backlog now stands at $51.3 billion.
Both companies are riding the same wave. The question now is whether enterprise AI demand can sustain the momentum through FY2027.
