(Bloomberg) — Lenovo Group Ltd.’s quarterly profit beat projections, highlighting how AI infrastructure spending is helping pull the global PC market out of a years-long funk.
Net income more than doubled to $692.7 million in the December quarter. That compares with an average estimate of $365 million. Revenue rose 20% to $18.8 billion, also beating projections.
Investors are betting that PC makers from HP Inc. to Dell Technologies Inc. will benefit in 2025 as consumers pick up devices with more AI features. The emergence of platforms such as DeepSeek could fire up enthusiasm for so-called AI PCs, while Chinese government subsidies buoy local consumption of electronics.
Still, potential US tariffs and macroeconomic headwinds threaten the industry recovery. And the concept of AI PCs remains untested with consumers around the world.
Lenovo’s server business has proven to be a bright spot. Now, the growing momentum of AI services should drive further interest in development and the servers critical to that movement. It shipped 4.8% more PCs in the final quarter of 2024, when the market grew for the first time in years, according to data from consultancy IDC.
But much hinges this year on so-called AI PCs. Lenovo and its rivals are making a big push in 2025 to add artificial intelligence capabilities, hoping to get consumers to upgrade. The reception to this new crop of computers will be crucial to driving the market’s recovery.
“On-device AI for PCs is inevitable. Therefore, right now it is about suppliers trying to be patient as their customers are dealing with headwinds unrelated to these technology advancements,” said Ryan Reith, group vice president with IDC’s Worldwide Device Trackers.
In November, Chief Executive Officer Yang Yuanqing raised his outlook for global shipments in 2025 to double-digit percentage growth, up from a previous forecast of 5% to 10%, citing demand for AI PCs and the replacement cycle facilitated by Windows 11.
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