Lenovo Sees 9% Revenue Growth in Q4, Driven by PC Sales and AI Opportunities

Chinese technology giant Lenovo has announced a 9% increase in revenue for the fourth quarter, reaching $13.8 billion, as the world's largest PC manufacturer recovers from a decline in demand following the COVID-19 pandemic.

According to LSEG data, the revenue for the January-March quarter exceeded the average estimate of $13 billion, based on forecasts from eight analysts.

Reuters reports that this marks the second consecutive quarter of revenue growth for Lenovo, following five consecutive quarters of revenue decline due to post-COVID slowdown.

PC shipments increased by 1.5% year-over-year, reaching 59.8 million units during the quarter, and Lenovo solidly maintains its position as the number one PC manufacturer with a 23% market share.

However, Lenovo's global revenue for the year ending March 31 decreased by 8% to $61.9 billion, exceeding analysts' forecasts of $56.19 billion.

The company's net profit for the January-March quarter surged 118% to $248 million, surpassing analysts' estimates of $162 million. Lenovo is also actively exploring opportunities in artificial intelligence, while continuing to develop its non-PC businesses, such as smartphones, servers, and IT services.

Revenue from its services business unit grew 8.5% to $1.8 billion during the quarter.

Analysts at Morgan Stanley have told clients that Lenovo is poised to be one of the main beneficiaries of the rise of AI-powered PCs. While AI PCs currently represent less than 5% of the market this year, they predict that around 64% of new PCs will be AI-powered by 2028.

They added that AI-powered PCs could account for up to 53% of Lenovo's revenue by 2028, the highest percentage among all PC manufacturers, compared to the current 2%.