Lenovo delivered its strongest quarter in company history, reporting revenue of $26.94 billion for Q1 FY2026/27, a 43% jump year-over-year and well above analyst estimates. The results were driven by surging artificial intelligence infrastructure demand, with AI-related revenue across enterprise infrastructure and consumer AI PCs rising 60% to $9.3 billion, about 35% of total group revenue.
Gartner projects global AI spending to hit $2.59 trillion in 2026, up 47% from the prior year, with AI infrastructure—including AI-optimized servers, networking, semiconductors and infrastructure-as-a-service—expected to account for more than 45% of that total. IDC data showed AI infrastructure spending reached $89.9 billion in Q4 2025, up 62% year-over-year, bringing full-year 2025 spending to $318 billion. IDC expects that figure to exceed $487 billion in 2026 and top $1 trillion by 2029.
The same AI buildout that is lifting Lenovo’s infrastructure business is also squeezing its PC segment. Gartner estimates DRAM and SSD costs will rise 130% by the end of 2026, pushing PC prices higher and cutting global PC shipments by roughly 10.4%. IDC projects an 11.3% drop in shipments and an 18.3% rise in average selling prices.
The market read Lenovo's figures as a positive signal for enterprise hardware peers. Hewlett Packard Enterprise shares opened at $58.78 on Thursday, up more than 8%, as investors repriced AI server exposure. Dell Technologies and HP Inc. also moved higher in pre-market trading. HPE's most recent quarterly report, released June 1, showed adjusted EPS of $0.79 versus a $0.54 consensus estimate and revenue of $10.68 billion versus $9.78 billion expected, up 40% year-over-year. HPE guided full-year fiscal 2026 EPS of $3.35 to $3.45, and Q3 EPS of $0.88 to $0.93.
Wall Street reinforced the move. Goldman Sachs kept a Buy rating on HPE with a $75 price target, while Morgan Stanley upgraded the stock to Overweight with a $69 target. Institutional ownership stands at 80.78%, and the analyst consensus is a “Moderate Buy” with an average target of $69.80. Bank of America has the highest stated target at $80. Among sector benchmarks, Dell’s Infrastructure Solutions Group revenue jumped 181% in its latest quarter, with AI-optimized server revenue up 757%, while HPE reported Cloud & AI revenue up 23%, server revenue up 33%, networking revenue up 148%, and a record $5.9 billion AI systems backlog.
Super Micro Computer had already lifted sentiment the prior session with blowout fiscal 2027 revenue guidance, making the broader AI infrastructure trade the center of market attention.
