Lenovo’s 159% Surge Masks a Wobbling Market as AI Server Demand Fuels the Fire

The numbers are staggering, but the story behind them is more nuanced than a simple rally. Lenovo Group has stormed to the top of the Hang Seng Index with a 159% annual gain, leaving second-placed Contemporary Amperex Technology’s 47% advance in the dust. Yet the broader Hong Kong market barely stirred: the Hang Seng eked out a 0.7% gain on Friday and closed May down 2.3%. The contrast could hardly be sharper.

The spark for Friday’s 21.95% surge to HK$24.00 came not from Lenovo itself, but from Dell Technologies. The US hardware giant raised its annual revenue forecast to a range of US$165bn to US$169bn and lifted its AI server outlook to around US$60bn, up from a previous US$50bn. Dell’s stock jumped nearly 39% after-hours, and investors immediately applied the same logic to Lenovo. The Chinese company’s shares opened with a 14.94% gap and touched an intraday high of HK$25.70 — a new 52-week peak — before settling. Trading volume hit 721.92 million shares, and turnover reached HK$17.44bn.

Lenovo’s own numbers gave the move a solid foundation. In the fourth quarter of its fiscal year, revenue climbed 27% to US$21.588bn, while adjusted net profit nearly doubled to US$559m. AI-related revenue surged 84% in the quarter and now accounts for 38% of total group sales. The Infrastructure Solutions Group posted a record quarterly revenue of US$5.6bn, up 37%, with operating profit of US$202m — a sharp turnaround from losses in prior periods.

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

For the full year, Lenovo’s revenue rose 20% to US$83.075bn, and adjusted net profit reached US$2.049bn, a 42% increase. The company also declared a final dividend of 33.70 Hong Kong cents per share, underlining management’s confidence. The AI server pipeline stood at US$21bn, backed by more than 5,800 customer installations.

The market’s enthusiasm is understandable. Lenovo is riding a wave that is both broad and deep. But the speed of the rally is extreme even by AI-hype standards. The stock added 109% in May alone — the strongest monthly gain since 1999. That kind of velocity invites a technical reckoning. The relative strength index sits at 76.2, deep in overbought territory, and the 30-day annualized volatility has exploded to 100.51%. Chart watchers note that the intraday high of HK$25.70 now serves as the first resistance level, while support lies at Friday’s low of HK$22.62. A break below that could signal that investors are questioning the pace of revaluation, not the AI thesis itself.

The German listing mirrored the frenzy, closing at €2.67 on Friday — up 22.76% for the day and 55.59% on the week. Since the start of the year, the stock has gained 152.96%.

What happens next will depend on whether Lenovo can convert that US$21bn pipeline into actual revenue and, crucially, margin. The Caixin manufacturing PMI due on Monday will test sentiment across Hong Kong tech stocks. If the data disappoints, the air around Lenovo could thin quickly. For now, the AI story remains intact, but the price of admission has never been higher.

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