Lenovo Revenue Soars 43% on AI Boom, But Reports Net Loss

Lenovo Group announced a significant 43% jump in quarterly revenue, surpassing forecasts with $26.94 billion for the three months ending June 30. This performance, the company's highest quarterly revenue growth in five years, was propelled by the booming artificial intelligence hardware market and the ongoing global memory chip shortage.

Artificial intelligence-related revenue alone grew 60% year-on-year, contributing $9.3 billion or 35% of the total revenue in the fiscal first quarter. Despite the strong top-line growth, Lenovo reported a net loss attributable to shareholders of $609 million, a reversal from a $505 million profit last year. This loss was primarily attributed to a non-cash fair value loss of $1.7 billion from the revaluation of warrants issued in 2025.

Lenovo's shares reached an all-time high before the results were announced, extending their year-to-date gains to 225%. The stock surged as much as 17% following the announcement. The company's performance stands out as competitors like Dell, Hewlett Packard, and Super Micro have faced increased costs due to soaring NAND and DRAM memory chip prices, leading them to raise their own prices by 10% to 30%.

The PC, tablet, and smartphone division, accounting for about 64% of total revenue, saw a 27% year-on-year revenue increase. Adjusted net income, excluding one-off items, more than doubled to $1.075 billion. Research and development expenses also rose by 30% year-on-year.

Globally, PC shipments declined by 2% year-on-year in the second quarter of 2026. However, Lenovo maintained its market leadership, holding a 25.6% market share. The company's AI server pipeline expanded dramatically, reaching $54.0 billion, a 157% quarter-over-quarter increase, reflecting strong demand from hyperscalers, AI cloud, and enterprise AI clients. This robust performance comes despite earlier warnings about pressure on PC shipments due to the intensifying memory chip shortage.