Dell Technologies (NYSE:DELL), HP Inc. (NYSE:HPQ) and Hewlett Packard Enterprise (NYSE:HPE) shares moved sharply higher in Thursday premarket trading after strong quarterly results from Lenovo (USOTC:LNVGY) boosted sentiment across the computer hardware and enterprise technology sector. Dell gained 4%, HP jumped 6.5% and HPE advanced 3.5% as Lenovo reported stronger-than-expected revenue growth, including a near doubling of sales in its infrastructure solutions business.
Lenovo revenue jumps 43%
Lenovo reported first-quarter revenue of $26.94 billion, representing a 43% increase compared with the same period last year.
The result comfortably exceeded the Bloomberg consensus forecast of $22.42 billion, highlighting strong demand across several of the company’s major businesses.
The performance provided a positive read-through for other hardware manufacturers, helping lift shares of Dell, HP and HPE before the U.S. opening bell.
Infrastructure solutions revenue nearly doubles
Lenovo’s infrastructure solutions business delivered the strongest growth during the quarter, benefiting from continued investment in data centre and artificial intelligence infrastructure.
Revenue from the segment surged 98% year over year to $8.51 billion, substantially ahead of the $6.13 billion expected by analysts.
The company’s intelligent devices division also recorded robust growth, with revenue increasing 27% to $17.11 billion.
Meanwhile, solutions and services revenue climbed 28% year over year to $2.88 billion, beating the consensus estimate of $2.71 billion.
The broad-based expansion suggested that demand remained healthy across both traditional computing products and higher-growth enterprise infrastructure.
AI-related revenue rises 60%
Artificial intelligence continued to become a larger contributor to Lenovo’s overall business.
The company said AI-related revenue increased 60% compared with the prior-year period and accounted for 35% of total group sales.
The figures reinforced expectations that continued spending on AI infrastructure could benefit a wider range of technology hardware companies beyond semiconductor manufacturers.
That trend may be particularly relevant for Dell and HPE, which have been expanding their exposure to servers and infrastructure designed to support increasingly demanding AI workloads.
Gross margin improves to 16.5%
Lenovo also recorded an improvement in profitability during the quarter.
Gross margin expanded to 16.5% from 14.7% in the same period last year, exceeding the analyst estimate of 16%.
The combination of rapid revenue growth and higher gross margin provided additional evidence that the company’s expansion was translating into stronger underlying financial performance.
Lenovo targets $100 billion in annual revenue
Following the strong start to its fiscal year, Lenovo said it expects group revenue to reach $100 billion during the current year.
The target points to continued confidence in demand across intelligent devices, infrastructure solutions and services, with AI-related products expected to remain an increasingly important growth driver.
The strong quarterly figures and ambitious annual revenue target helped lift sentiment across the broader hardware sector, with investors viewing Lenovo’s performance as a potentially positive indicator for upcoming results from Dell, HP and HPE.
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