Lenovo ended the first quarter of the 2026/27 financial year with revenue of $26.94 billion, up 43 per cent on the previous year. The result was also significantly better than market expectations, which stood at around $22.3 billion. The company reported that revenue from artificial intelligence had risen by 60 per cent and now accounted for 35 per cent of the group’s sales.
Infrastructure saw the strongest growth. Revenue from the servers and data centre solutions division rose by 98 per cent to $8.5 billion, whilst the order backlog for AI servers reached $54 billion. This shows that Lenovo is becoming less reliant on the personal computer market alone and is increasingly benefiting from investments by businesses and cloud operators in data centres.
At the same time, the AI boom is affecting the hardware market in two ways. Demand from data centres is limiting the availability of memory and driving up its prices. According to IDC, global PC shipments fell by 4.9 per cent year-on-year in the second quarter, whilst TrendForce forecasts a further rise in contract prices for DRAM and NAND in the third quarter. For manufacturers, this means pressure on margins and device prices, whilst for customers it poses the risk of more expensive laptops and longer hardware replacement cycles.
Lenovo reported a net loss of $609 million, compared with a profit of $505 million a year earlier, but the main reason was a non-cash loss of $1.69 billion arising from the valuation of warrants. After adjustments, net profit stood at around $1.1 billion.
The key takeaway is therefore twofold: AI is accelerating Lenovo’s diversification and infrastructure growth, but at the same time is driving up costs in the core PC market. Maintaining the current pace will depend on the sustainability of investment in data centres and the company’s ability to pass on higher component costs to customers.
