Although Lenovo Group's revenue growth in the last quarter was better than expected, reaching US$22.2 billion, its net profit fell 21% year-on-year. After Lenovo announced its quarterly results as of the end of last year, its stock price fell 6.3%, highlighting market concerns that rising memory chip prices would put pressure on profit margins.
Holiday promotions and early purchases driven by expectations of price increases are boosting the PC industry. According to data from consulting firm IDC, the overall personal computer (PC) market shipments increased by 9.6% last quarter, with Lenovo, HP and Dell all recording double-digit growth. The AI boom has led to a tight supply of consumer electronics components such as memory chips. The impact of this global supply shortage on margins is expected to intensify in the coming months.
Analysts at UOB Kay Hian pointed out in the report: "We expect this early release demand to continue in the first quarter, but as inventory with lower purchase prices is depleted in the first quarter, there may be more price increases in the future, and ultimately affect end demand."
Industry giants such as Lenovo, which has reported strong momentum in its artificial intelligence server business, are better positioned to negotiate for priority supplies.
Thanks to the investment boom in AI infrastructure, Lenovo's Infrastructure Solutions Group, which is responsible for servers and storage hardware, saw its quarterly revenue increase by 31% to US$5.2 billion, setting a record high.