In May, Lenovo chairman and CEO Yang Yuanqing set a goal of reaching US$100 billion in annual revenue within two years, from US$83.1 billion then, implying about 9.7 per cent compound growth. On 13 August, Lenovo reported its first fiscal-quarter 2026/27 results for the period ended 30 June 2026: revenue of 183.4 billion yuan, up 43 per cent, with adjusted net profit of US$1.075 billion. The shares jumped more than 20 per cent intraday, adding about HK$72.7 billion (roughly 6.25 billion yuan) in a day to a HK$432.9 billion market cap, and are up over 280 per cent this year.
AI is now the engine. AI-related revenue rose 60 per cent to 63.4 billion yuan, 35 per cent of the quarter’s total; AI services revenue climbed 141 per cent; R&D spend rose 30 per cent. By region, the Americas led with US$9.909 billion, up 58 per cent, EMEA US$6.398 billion, up 53 per cent, China US$5.864 billion, up 25 per cent, and Asia-Pacific US$4.773 billion, up 28 per cent. Gross profit was US$4.452 billion, up 60 per cent, with gross margin up 1.8 points to 16.5 per cent, helped by the infrastructure group’s stronger profitability.
Adjusted operating profit was US$1.523 billion, up 141 per cent, and adjusted net profit US$1.075 billion, up 176 per cent, with a 4.0 per cent net margin nearly doubling. The Intelligent Devices Group (IDG) earned US$17.106 billion, up 27 per cent, at a 7.1 per cent operating margin. The Infrastructure Solutions Group (ISG) earned US$8.510 billion, up 98 per cent, swinging to a US$777 million operating profit from an US$85 million loss, a 9.1 per cent margin, on servers, AI compute and storage. The Solutions and Services Group (SSG) earned US$2.884 billion, up 28 per cent, at a 24.2 per cent margin.
Lenovo’s AI-server order backlog reached US$54 billion (about 360 billion yuan), up 157 per cent quarter on quarter from US$21 billion, covering hyperscalers, AI clouds and enterprise AI. Yang said ISG’s potential is far from exhausted and there is still over US$50 billion in the pipeline. Operating cash flow was about US$718 million, down 54 per cent, with capex US$374 million and free cash flow US$344 million.
Yang conceded AI may have local bubbles, “whether everyone is pouring money into foundation models and over-spending there can be questioned”, but insisted AI as a direction is absolutely not a bubble and its reach and broad access have barely begun. The real test is whether this quarter’s growth converts into sustained near-10 per cent revenue gains. The swing factor is no longer PCs but AI infrastructure.
PC shipments fell 4.9 per cent in the second quarter and may drop 11.3 per cent for the full year on memory shortages, yet Lenovo grew on scale. AI demand is shifting from training to inference and enterprise agents, spreading from a few giants’ capex to broader IT budgets, which suits Lenovo’s role integrating GPUs, servers, storage, networking, liquid cooling and services. Total assets reached US$70.112 billion, up US$13 billion in three months, with inventory and receivables each up about a third, the cost of scaling hardware. The question now is whether AI demand becomes durable, stable free cash flow.
Editor’s note: This is an adapted translation of the original Sohu IT report. It has been trimmed and restructured for readability for an international business audience.