(May 29): Lenovo Group Ltd is set for its best month in more than a quarter-century, with the stock doubling in May as investor enthusiasm builds around the company’s artificial intelligence (AI)-driven growth outlook.
The shares soared as much as 31% on Friday and have gained 109% this month, putting them on track for their biggest monthly advance since 1999. The rally accelerated after earnings showed AI-related revenue helped offset pressure from rising component costs, helping it extend its run as the best performer on the Hang Seng China Enterprises Index this year.
The latest surge also comes as Dell Technologies Inc delivered upbeat guidance tied to strong AI server demand, lifting computer stocks across Asia. The read-across from Dell’s outlook has fuelled optimism over Lenovo, with investors increasingly viewing the company as a potential AI infrastructure play.
“AI server growth is obviously a driver, with demand now spreading from hyperscalers to enterprise for AI inferencing demand, which benefits conventional server OEMs like Lenovo and Dell,” Bloomberg Intelligence analyst Steven Tseng said.
Lenovo’s fiscal-year earnings showed it held margins steady despite a memory chip squeeze, supporting the view that the company is better positioned than smaller rivals, with sentiment also helped by optimism around its AI server and AI agent businesses and further boosted after Goldman Sachs more than doubled its target price on the stock.
The computer hardware firm’s share gains buck the trend of other Hong Kong-listed tech companies, where internet platforms face intense competition and profitability pressure from the need for heavy spending on AI hardware and infrastructure. The Hang Seng Tech Index has fallen about 12% this year.
See also: Sea sets up AI investment team as part of tech pivot — Bloomberg
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