Lenovo shares more than doubled in May thanks to the AI ​​server boom, the best month in 27 years

Lenovo shares increased by 31% on Friday and is now up 109% in May, its best monthly performance since 1999.

Shares of the world’s largest personal computer maker have more than doubled this month, making it the best performer on the Hang Seng index since the beginning of the year, with an increase of 159%.

The gathering was not random. Lenovo’s fourth-quarter earnings Show Quarterly revenue of $21.6 billion – up 27% year over year and the fastest quarterly growth rate in five years. Net profit was $521 million, up 479% from $90 million the previous year. When Lenovo nearly quadruples its quarterly earnings, it forces the market to completely rethink its price targets.

The driver behind this is Infrastructure Solutions Group, or ISG — a division of Lenovo that builds AI-optimized servers, storage systems, and data center products for large enterprise customers and cloud providers like Amazon, Microsoft, and Google. ISG to publish It reported quarterly revenue of $5.6 billion, an increase of 37% year over year, and exceeded $19.2 billion for the full fiscal year.

Across the company, AI-related revenue grew 84% year over year and now represents 38% of Lenovo’s total quarterly sales. More than $1 out of every $3 Lenovo earns today goes back to AI. Goldman Sachs More than double Price target on Lenovo after results.

Then came Dell. On Thursday, Dell Technologies I mentioned Q1 FY2027 revenue was $43.84 billion, up 88% year over year, and raised full-year AI server revenue guidance to $60 billion. Dell’s AI server backlog now stands at $51.3 billion. Investors read these numbers, looked at Lenovo, and bought.

“AI server growth is clearly the driver, with demand now spreading from hyperscalers to enterprises for AI inference, benefiting traditional server OEMs like Lenovo and Dell,” Bloomberg Intelligence analyst Steven Tseng said. He said.

This shift from hyperscale companies – like the Amazons and Googles – to regular enterprise companies is the key development here. for two years, Building artificial intelligence infrastructure It was centered around Nvidia chips and a handful of niche players. Lenovo and Dell are the companies that are assembling shelves, qualifying hardware configurations, and shipping compute-ready systems to companies that want AI without building it from scratch.

Lenovo also still runs its PC business well. The smart device group posted $14.6 billion in fourth-quarter revenue, a 24% increase year-over-year, with Lenovo maintaining a 24.4% global PC market share – its biggest lead over its closest competitor in 15 years. the Wave computer AI Contributes. But it was the server infrastructure that moved the needle.

The contrast with the rest of Hong Kong’s tech companies makes the rise even steeper. The Hang Seng Tech Index has fallen more than 15% this year, dragged down by online platforms’ profit margins on spending on AI hardware. Lenovo is in the opposite position, selling infrastructure, not buying it.

CEO Yuanqing Yang Named Fiscal 2026 is the best year in Lenovo’s 40-year history and it has set a target of US$100 billion in annual revenue within two years. Full-year revenue was $83.1 billion, up 20% — the first time the company has surpassed the $80 billion mark.

ISG enters fiscal 2027 with an AI server pipeline exceeding $21 billion in committed demand, though the speed at which Lenovo can advance against it depends on securing GPU allocations from Nvidia, which remains a core supply constraint across the entire server industry.