Lenovo’s profit beats estimates as AI fuels PC recovery hopes

Investors are betting that PC makers from HP to Dell Technologies will benefit in 2025 as consumers pick up devices with more AI features

LENOVO Group’s quarterly profit beat projections, highlighting how artificial intelligence (AI) infrastructure spending is helping pull the global personal computer (PC) market out of a years-long funk.

Net income more than doubled to US$692.7 million in the December quarter. That compares with an average estimate of US$365 million. Revenue rose 20 per cent to US$18.8 billion, also beating projections.

Investors are betting that PC makers from HP to Dell Technologies 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 per cent 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 AI 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 per cent, citing demand for AI PCs and the replacement cycle facilitated by Windows 11. BLOOMBERG

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