Lenovo’s 109% May Surge Sends Stock to Record High, But Overbought Signals Raise Bar for Further Gains

Lenovo capped its strongest month since 1999 with a rally that pushed shares to an all-time high, yet technical indicators now flash caution after the breakneck ascent. The stock climbed nearly 22% on the final trading day of May to reach an intraday record of 24.70 Hong Kong dollars and closed at 24.00 HKD, delivering a monthly gain of roughly 109%. On a euro basis, the equity stood at 2.67 EUR, representing a year-to-date advance of almost 153% and a near-tripling from the 52-week low hit in January.

The fundamental catalyst behind the surge is unmistakable: Lenovo’s transformation from a PC maker into an integrated artificial-intelligence infrastructure provider is paying off. In the fiscal 2025/26 results, the Infrastructure Solutions Group reported an 84% year-on-year increase in AI-related revenue, which now accounts for 38% of total company sales. Adjusted net income in the final quarter doubled to $559 million. The company also managed to keep margins stable despite rising costs for memory chips and storage components, a sign of growing pricing power in the AI server segment. Dell’s recent bullish commentary on AI demand further validated the trend, helping to fuel the re-rating.

Analysts have scrambled to adjust their valuations. Goldman Sachs lifted its price target to 27.00 HKD while maintaining a buy rating. Macquarie followed with an outperform call and a target of 21.75 HKD, and Citi set its target at 20.00 HKD, pointing to robust server demand as a key driver.

Should investors sell immediately? Or is it worth buying Lenovo?

On the technical front, the advance has stretched valuations significantly. The relative strength index sits at 76.2, placing the stock in overbought territory. The 50-day moving average of 1.31 EUR trails more than 100% below the current price, underscoring how exceptional the move has been. Support now lies at the Friday low of 2.35 EUR (equivalent to roughly 22.20 HKD) and, further down, at the prior close of 2.05 EUR. Resistance remains at the all-time high of 24.70 HKD. A consolidation in the near term would be typical after such a vertical run.

Looking ahead, Lenovo’s calendar is light on company-specific events until the annual general meeting on July 23. At that meeting, shareholders will vote on a proposed final dividend of 0.337 Hong Kong dollars per share, up from 0.305 HKD last year, with the ex-dividend date set for August 5. In the meantime, macroeconomic data will dictate the mood. China’s purchasing managers’ index for May is due on June 1, followed by US services data on June 3 and the critical US jobs report on June 5. Any shift in global interest-rate expectations could ripple through tech stocks, testing whether Lenovo can hold above the support zone or if traders will opt to lock in profits after such a historic run.

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