Lenovo Group Ltd reported a stronger-than-expected profit for the September quarter, defying a sluggish PC industry. Net income surged 44% to US$358.5 million, beating the projected US$343.3 million, while revenue climbed 24% to US$17.85 billion, also surpassing analyst expectations, according to Lenovo’s Friday filing.
The company’s PC shipments rose 3% year-on-year, contrasting declines seen by competitors like Dell Technologies Inc and Apple Inc, data from researcher IDC revealed. “The market is taking a breather before the year-end buying period,” commented Bryan Ma, IDC’s vice president.
This year, PC makers are increasingly integrating artificial intelligence features, with support from Microsoft Corp, to entice consumers into upgrading their devices. As the sector rebounds from recent lows, consumer response to these AI-powered PCs will be pivotal. However, the demand for such high-priced devices remains uncertain.
Lenovo’s AI ambitions extend beyond consumer products. The company’s infrastructure solutions division, focused on selling servers to large-scale clients, represents a significant aspect of its AI investment strategy. Lenovo anticipates growth in this segment by providing data centre hardware that accelerates AI model training and computations.
“Lenovo’s data centre segment could grow substantially with AI server orders and improved supply of Nvidia’s GPUs, though profitability may remain muted,” wrote Bloomberg Intelligence analysts Steven Tseng and Sean Chen in a pre-earnings report.
Bloomberg
