Lenovo, the world's largest PC maker, posted a 38% increase in net income in the second quarter of 2024, reaching $243 million. The rebound, reported Thursday, marks the second consecutive quarter of growth in a market in decline for years.
Lenovo's revenue also experienced significant growth, increasing 20% to $15.45 billion. This growth was driven by an acceleration in its computing, infrastructure and services segments, the company reported.
Lenovo unveiled its new artificial intelligence (AI)-equipped PCs in May, using Microsoft's Copilot tool and Qualcomm's Snapdragon X Elite processor. The company believes this launch represents a “tipping point” for the industry, which could lead the global PC market to a long-term recovery beyond pre-pandemic levels.
The adoption of AI has been a key driver in the performance of its smart devices segment, which includes PCs, smartphones and tablets. Lenovo noted that this adoption has enabled above-market growth, high average selling prices and sustainable profitability in this segment.
In addition, Lenovo diversified its revenue streams beyond its PC business, with non-PC revenue increasing 5%, now accounting for 47% of total sales last quarter.
Lenovo's infrastructure solutions business, which encompasses servers, storage and data center networking, saw a 65% increase in sales. This growth was driven by the launch of AI infrastructure products and improved AI graphics processing unit offerings.
In May, Lenovo raised $2 billion from a Saudi Arabian sovereign wealth fund unit and signed an agreement to build a manufacturing center in the region. These deals, according to the company, will help accelerate its “ongoing global strategic transformation” as it aims to grow services revenue alongside its core PC business.
According to The Wall Street Journal, Lenovo believes that its strong performance, combined with continued progress in hybrid artificial intelligence, will enable the company to continue to achieve sustainable growth and increased profitability.
Lenovo is clearly positioning itself to take advantage of AI adoption in the global technology industry, looking to not only regain ground in the PC market, but also expand into critical areas such as infrastructure and services.
