- Lenovo posted record quarterly revenue of $26.94 billion, up 43% year-on-year, driven by demand for AI servers and AI-capable PCs.
- A $609 million reported net loss was a non-cash warrant-revaluation effect; adjusted net income rose 176% to $1.075 billion.
- AI now accounts for 35% of revenue, and soaring memory-chip prices pushed Lenovo to raise PC prices twice during the year.
- Lenovo — posted a record AI-driven quarter
- Dell, HP, Super Micro — rivals also raising PC prices 10–30%
HONG KONG — Lenovo Group Limited reported revenue of US$26.94 billion for the first quarter of its 2026/27 financial year, up 43% year on year and an all-time quarterly high, as demand for AI servers and AI-capable PCs accelerated.
The figure, for the quarter ended 30 June 2026, comfortably beat analyst expectations of roughly US$22.3 billion. Lenovo shares hit a record high following the results. The surge ties to the AI data center boom and its global memory chip shortage.
Lenovo Q1 Revenue and Earnings at a Glance
The headline numbers from Lenovo’s record first quarter break down as follows:
| Metric | Q1 FY2026/27 |
|---|---|
| Revenue | US$26.94 billion, up 43% year on year |
| Analyst estimate | ~US$22.3 billion |
| Reported net result | US$609 million net loss attributable to shareholders |
| Adjusted net income | US$1.075 billion, up 176% |
| AI-related revenue | US$9.3 billion, up 60% — 35% of group revenue |
| AI server pipeline | US$54 billion, up 157% quarter-on-quarter |
Why Lenovo Reported a Loss Despite Record Q1 Revenue
Lenovo posted a net loss of US$609 million attributable to shareholders, against analyst expectations of a US$589 million profit — even as revenue hit a record.
The gap is an accounting effect, not an operating one. A non-cash warrant revaluation loss of about US$1.7 billion ran through the reported figure. Warrants give their holder the right to buy shares at a set price; when the share price rises, the accounting value of that obligation rises with it, producing a charge. No cash left the business.
Stripping that charge out, adjusted net income was US$1.075 billion, up 176% year on year and above US$1 billion for the first time. So: is Lenovo profitable? On an operating and adjusted basis, clearly yes. On a reported basis this quarter, no — because a rising share price generated a paper charge. Cheaper frontier models are reshaping the AI economics behind this demand, as in Anthropic’s Opus 5 at half the price.
AI Revenue Reaches 35% of Group Sales
AI-related revenue was US$9.3 billion, up 60% year on year, and now accounts for 35% of Lenovo’s total revenue. The forward book is larger still: the company’s AI server pipeline stands at US$54 billion, up 157% from the previous quarter. The momentum reflects Lenovo’s hybrid AI strategy, which spans on-device AI PCs, enterprise AI infrastructure and AI services. AI is reshaping big-tech balance sheets, as Alibaba’s profit squeeze shows.
Segment Breakdown: AI Servers, Services and PCs
ISG, which houses the AI server business, nearly doubled revenue and delivered an operating profit of US$777 million at a record 9.1% margin, the number analysts focused on, since AI server growth has historically come at thin margins. The result underlines how far the PC maker has moved into AI infrastructure.
SSG generated US$697 million in operating profit at a 24.2% margin, with AI services revenue growing in triple digits. Lenovo said its global PC market share was 24.2% and its AI PC share 25.1%. Research and development spending rose 30%. Enterprise tech priorities are shifting toward security too, seen in the call for a defensive surge against AI cyberattacks.
Memory costs and why PC prices are rising in 2026
The quarter also showed how the AI boom is reaching consumers. Soaring DRAM and NAND memory chip prices have pushed up the cost of building PCs, and Lenovo raised prices twice during the year in response. Rivals Dell, HP and Super Micro have raised prices by 10–30%. Buyers hunting scarce parts increasingly compare laptops and consumer electronics suppliers.
“We accurately anticipated supply shortages and cost increases (of memory chips), and addressed them successfully,” Chairman and CEO Yang Yuanqing said.
The mechanism is straightforward: AI data centres are absorbing memory supply, memory prices rise, and PC makers pass the cost through. Buyers should expect laptop prices to stay elevated while AI infrastructure demand holds. Enterprise demand is uneven, with only 16% of Japanese firms using AI company-wide.
Frequently Asked Questions (FAQs)
Lenovo’s Q1 revenue rose 43% year on year to a record US$26.94 billion for the quarter ended 30 June 2026, comfortably beating analyst expectations of roughly US$22.3 billion. Shares hit a record high after the results, driven by demand for AI servers and AI-capable PCs.
The US$609 million reported net loss was an accounting effect, not an operating one. A non-cash warrant revaluation loss of about US$1.7 billion ran through the figure because a rising share price lifts the accounting value of warrant obligations. No cash left the business.
On an operating and adjusted basis, yes. Stripping out the warrant charge, adjusted net income was US$1.075 billion, up 176% year on year and above US$1 billion for the first time. Only the reported result showed a loss this quarter, caused by the paper charge.
AI-related revenue reached US$9.3 billion, up 60% year on year, and now accounts for 35% of Lenovo’s total revenue. The AI server pipeline stands at US$54 billion, up 157% quarter-on-quarter, reflecting Lenovo’s hybrid AI strategy across AI PCs, infrastructure and services.
Soaring DRAM and NAND memory chip prices have raised the cost of building PCs, so Lenovo raised prices twice during the year. AI data centres are absorbing memory supply, pushing prices up, and rivals Dell, HP and Super Micro have lifted prices by 10–30%.
Lenovo reported a global PC market share of 24.2% and an AI PC share of 25.1%. Its Infrastructure Solutions Group nearly doubled revenue with a record 9.1% operating margin, while its Solutions and Services Group ran a 24.2% operating margin.
The figures cover the first quarter of Lenovo’s 2026/27 financial year, the three months ended 30 June 2026. It was the company’s strongest quarter in group history by revenue.
