Lenovo is increasingly emerging as one of the quieter winners of the global artificial intelligence spending boom, with analysts pointing to the company’s expanding server business, resilient margins and strengthening role in AI infrastructure as key drivers behind a potential re-rating of the stock.
Analysts say the world’s largest personal-computer maker is benefiting from a surge in demand for AI servers as hyperscalers and Chinese internet companies ramp up investments in computing infrastructure to support generative AI and agentic AI applications.
The stronger outlook comes after Lenovo reported its fastest quarterly revenue growth in five years, powered by demand for AI-enabled devices and infrastructure products.
Morningstar analyst Jing Jie Yu said Lenovo is becoming an emerging beneficiary of accelerating AI infrastructure spending globally.
Lenovo’s growing AI server revenue is being driven by continued investments from US hyperscalers as well as rising AI capital expenditure by Chinese technology firms, Yu said in a research note.
Morningstar expects Lenovo’s infrastructure segment revenue to rise 35% in fiscal 2027, supported by aggressive server deployments and broader enterprise AI adoption.
Yu said Lenovo’s longstanding ties with chipmakers are helping it maintain reliable access to key components at a time when supply chains remain under pressure.
“Customers are racing to bring AI infrastructure online and will pay more to secure Lenovo’s ability to coordinate complex supply chains in server manufacturing,” Yu said.
DBS analyst Jim Au also said Lenovo’s latest quarterly performance strengthened the case for investors to increasingly view the company as an AI infrastructure and hybrid AI platform company instead of merely a PC manufacturer.
“Lenovo has now demonstrated that its AI infrastructure growth can convert into profit,” Au said.
DBS expects Lenovo’s infrastructure group revenue growth to remain in the 30%-40% range while operating margins gradually approach the company’s long-term 5% target.
According to Au, demand linked to agentic AI, enterprise inference workloads, rack-scale deployments and higher-value storage systems should continue supporting the division’s expansion.
Au said Lenovo’s fiscal 4Q results strengthen case for re-rating of its shares.
DBS raised Lenovo’s target price to HK$23.50 from HK$19.00.
Lenovo shares last closed at HK$15.75.
Lenovo on Friday reported quarterly revenue of $21.60 billion for the three months ended March, up 27% from a year earlier.
The growth marked the company’s strongest quarterly expansion in five years, triggering an almost 20% jump in its shares.
AI-related businesses accounted for 38% of total revenue during the quarter, underscoring the company’s increasing exposure to the fast-growing AI market.
For the full fiscal year, Lenovo’s revenue reached $83.1 billion.
Net profit climbed nearly sixfold to $521 million, well above analyst expectations of $291 million, according to a FactSet poll.
Adjusted net profit doubled to $559 million, also exceeding estimates.
The company is now targeting $100 billion in annual revenue within the next two years as it builds on momentum in AI infrastructure and premium computing devices.
Industry data from IDC showed Lenovo maintained its position as the world’s top PC maker during the first quarter of 2026 with a 25% market share.
The company also said premium PCs accounted for half of total shipments during the latest quarter.
Memory shortages remain a risk but Lenovo able to pass on costs well
Despite the upbeat outlook, analysts cautioned that rapid AI infrastructure deployment is worsening a global memory-chip shortage, creating pricing pressure across the broader technology industry.
The surge in AI-related demand has tightened supply for PCs and smartphones while driving up memory costs for manufacturers.
Still, Lenovo executives have maintained that the company’s supply-chain capabilities and product mix improvements should help it navigate the environment better than rivals.
IDC analyst Jean Philippe Bouchard said the industry’s supply-chain resilience would face a critical test.
“The strength of every PC vendor’s supply chain and ability to access core components, such as memory, will be tested,” Bouchard said.
Morningstar’s Yu however said that Lenovo has been able to pass on rising memory costs better than feared, likely due to its strong brand equity and premium positioning.
Morningstar expects Lenovo’s average PC prices to rise by 25% in fiscal 2027 and by another 6% in fiscal 2028, though shipment volumes may decline as higher prices weigh on demand.
Still, Yu noted that lower sales volumes would likely hurt margins less than absorbing surging memory costs in an attempt to protect market share.
Industry data from IDC showed Lenovo maintained its position as the world’s top PC maker during the first quarter of 2026 with a 25% market share.
The company also said premium PCs accounted for half of total shipments during the latest quarter.
DBS had previously said Lenovo’s server business could achieve sustainable profitability from the current fiscal year as deployments scale further and liquid cooling becomes increasingly standard in new AI data centers.
With investors searching for companies benefiting from the next phase of the AI buildout beyond chipmakers, analysts increasingly see Lenovo positioning itself at the center of the global AI infrastructure expansion.
