Thanks to strong demand for their AI-driven servers, Lenovo's revenue for the third quarter shot up by 20% to $18.8 billion, beating the LSEG consensus estimate of $17.8 billion.
Their net profit more than doubled from last year, hitting $693 million, which is way above the average forecast of $367.7 million.
While Lenovo is mainly known for its PCs, the company has branched out in recent years, diving into software and services. They’re also gearing up to take advantage of the growing interest in AI by expanding their AI server and software offerings.
Last May, Lenovo rolled out its first AI-powered PCs in China, followed by a global launch in September. CEO Yang Yuanqing believes that by 2025, AI PCs could make up 25% of Lenovo's shipments, potentially rising to 80% by 2027.
This week, they announced that they’ve integrated technology from DeepSeek, a startup that’s shaking up the AI landscape with its affordable model, into their devices like PCs and tablets.
"DeepSeek has really boosted AI efficiency. The new models, which are efficient in terms of inference and low on computing costs, will make AI more accessible," Yang shared with Reuters after the earnings report.
He mentioned that this could drive demand and expand the applications of AI, and the rise of DeepSeek might also increase the need for GPU servers.
Lenovo's infrastructure solutions group, which includes servers, saw a whopping 59% revenue increase in the December quarter compared to last year.
Their solutions and services group, which provides cloud-based software for businesses, brought in $2.3 billion, marking a 12% rise from the previous year.
After the results were announced, Lenovo's shares listed in Hong Kong initially spiked but later fell by 6%. Still, they’ve seen a 17% increase so far this year.