22-05-2025
Lenovo's Shares Sink After PC, AI Hardware Rivals Squeeze Profit
(Bloomberg) -- Lenovo Group Ltd.'s shares fell their most in more than a month after reporting a worse-than-expected 64% drop in earnings, reflecting competitive pressures in the AI server and PC markets.
The Chinese company reported net income of $90 million for the March quarter versus projections for more than $200 million, reflecting a loss on derivatives and pricing pressures in a stagnant PC market. Its stock slid as much as 5.4% in Hong Kong, despite a faster-than-anticipated 23% rise in sales to about $17 billion.
Lenovo and its rivals are grappling with uncertainty about whether demand for PCs and AI servers will hold up if the global economy wobbles. The Trump administration has initiated trade probes as a precursor to imposing tariffs on a broad range of semiconductors and electronics, threatening to upend the global tech supply chain.
For now, the US has exempted semiconductors, mobile phones, computers and other electronics imports from 145% duties applied to China. That announcement was seen as a boon to tech giants like Apple Inc. and Nvidia Corp., but Trump and his advisers quickly said the relief would be short-lived and that separate levies would be placed on chips.
'We definitely are not worried about the tariffs, but we are worried about uncertainty,' Chief Executive Officer Yang Yuanqing told Bloomberg News. 'For the longer term, the PC market is related to the global economy, whether it'll be impacted by tariffs or geopolitical tension.'
In PCs, Lenovo cemented its lead over HP Inc. and Dell Technologies Inc. in the first quarter, when it grew worldwide shipments almost 11%, according to IDC. Investors remain focused on AI server demand, given uncertainty about the macroeconomic outlook and sustainability of the artificial intelligence boom.
A gradual recovery in the PC market should continue in the current quarter, Yang said.
More stories like this are available on
