Lenovo Group (00992) surged over 10% in early trading, reaching a new all-time high, following a doubling of its share price last month. As of press time, the stock was up 8.17% to HK$25.96, with a turnover of HK$3.7 billion.

The rally was fueled by optimism in AI infrastructure stocks, sparked by Dell Technologies' record-breaking Q1 FY2027 results released recently, which sent its shares soaring over 32% last Friday.

Notably, Lenovo's AI transformation has fully materialized. For the full fiscal year 2025/2026, AI-related revenue grew 105% year-over-year, accounting for 33% of total revenue. In the fourth fiscal quarter, AI revenue growth remained robust at 84%, with quarterly net profit doubling year-over-year. The core AI Infrastructure Solutions Group (ISG) business successfully reached an inflection point toward profitability.

Analysts note that Lenovo's current AI server pipeline stands at $21 billion, with cumulative AI deployments for over 5,800 customers. According to Dell's earnings call, the current bottleneck in servers lies in component supply. Lenovo's annual server manufacturing capacity exceeds 70,000 racks, including over 11,000 direct liquid cooling racks. The company has begun shipping the GB300NVL72 and is on track to introduce the Rubin platform in the second half of the year, highlighting its robust supply chain capabilities honed through years of international operations.

Given Dell's market reaction, original design manufacturers (ODMs) with AI server delivery capabilities, supply chain expertise, and major client orders are being revalued. Lenovo is poised for a potential central upward re-rating in its valuation.