Lenovo misses profit estimates, company to invest additional $1 bn in Artificial Intelligence

Chinese PC major Lenovo Group on Thursday reported revenue of $12.9 billion and net income of $191 million for the June quarter which did not meet analysts’ estimates.

Revenue from the non-PC businesses accounted for 41 per cent of the company’s revenue, with the service-led business achieving strong growth and sustained profitability.

Lenovo was the top vendor in the global PC market with 23.1 per cent market share in the June quarter though its shipments nosedived by 18.4 per cent, according to the IDC.

The company said it remains committed to doubling investment in innovation, including an additional $1 billion investment over the next three years to accelerate artificial intelligence (AI) deployment for businesses around the world.

“Last quarter, the macro environment presented challenges, and our hardware business remained in a phase of adjustment, but we persisted in executing our strategy. Our service-led business achieved strong growth and sustained profitability,” said Yuanqing Yang, Chairman and CEO.

“As we continue to drive innovation and intelligent transformation, I am confident in the long-term position to deliver sustainable profitability and growth in the future,” he added.

Despite the past quarter’s challenging market and unfavorable macroeconomic conditions, Lenovo sees signs of market stabilization and improvement, component prices bottoming out, and believes the client device market can be expected to recover and resume growth in the second half of this fiscal year.

Lenovo continues to embrace AI from all aspects, having built its advantages in computing power from client to edge to cloud and network.

Breakthroughs in large language models and AI generated content mark a major leap in AI development and application and serve as a catalyst and accelerator that are boosting the adoption of AI, said the company.