Lenovo’s AI Hardware Offensive: Record Results and Nvidia Deals Collide with Overbought Signals

The euphoria surrounding Lenovo’s artificial-intelligence push hit a speed bump this week as the stock retreated nearly 8% in Hong Kong trading on Wednesday, just one session after touching an all-time high. The pullback, while sharp, lands against a backdrop of extraordinary momentum: over the past twelve months the shares have nearly tripled, and the company has just reported the strongest financial results in its history. The question now is whether this is a healthy breather or the start of a more meaningful correction.

What makes the retreat particularly striking is the scale of the recent run. The Hong Kong-listed stock closed at 27.42 Hong Kong dollars on June 2 to set a new record, before profit-taking knocked it lower. In European trading, the same equity has surged 173% since the start of the year alone, leaving it deeply overbought with a relative-strength index of 86.6 — well above the 70 threshold that typically signals exhaustion. The annualised 30-day volatility has also topped 100%, underscoring the ferocity of the move.

Record figures fuel the narrative

That rally is grounded in concrete numbers. For the fourth quarter of its fiscal year 2025/26, Lenovo posted revenue of $21.6 billion, a record for any Q4 and 27% above the year-ago period. Adjusted net income doubled to $559 million. For the full year, sales hit $83.1 billion, up more than a fifth, while profit climbed 38%. AI-related revenue alone surged 84% and now accounts for 38% of the group’s total — a striking shift for a company long associated with commodity PC hardware.

The boom has been matched by a string of strategic announcements that reinforce Lenovo’s position in the global AI supply chain. On the server front, the company is among the primary partners — alongside Microsoft and Dell — for Nvidia’s next-generation Vera Rubin platform, which has entered serial production. First deliveries are expected in the autumn of 2026, with Citigroup Research flagging Vera’s processor as a particular catalyst for Lenovo’s enterprise and data-centre segments. Guotai Haitong Research signalled a structural re-rating of the company as early as June 1, citing exactly this deepening role.

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A twin-pronged product assault

On the PC side, Lenovo used the Computex trade show in Taipei to unveil the Yoga Pro 9n, one of the first laptops powered by Nvidia’s RTX Spark superchip. The device is aimed at creative professionals and marks Lenovo’s entry into a new ecosystem built on Arm architecture and unified memory. The chip itself is a technical beast: up to 20 Arm CPU cores, a Blackwell GPU with 6,144 CUDA cores, as much as 128 GB of LPDDR5X memory, and memory bandwidth of up to 300 GB/s. Crucially, it delivers a petaflop of AI compute and runs the full CUDA software stack natively — a first for a Windows laptop. That means local execution of AI models with up to 120 billion parameters. Pricing and final specifications have not been announced, but the Yoga Pro 9n is scheduled to hit the market in the autumn of 2026, the same window as Nvidia’s Vera Rubin server chips.

The dual AI push — servers and PCs — has broadened Lenovo’s product portfolio well beyond traditional hardware. The company also completed the acquisition of Infinidat in April 2026, strengthening its high-performance storage business and giving it access to roughly 85% of the $38 billion enterprise-storage market. And at the Auto China 2026 exhibition, Lenovo deepened its collaboration with autonomous-driving firm WeRide, with a joint goal of deploying 200,000 autonomous vehicles — including robotaxis — globally by 2031.

Short sellers and technicals flash caution

For all the fundamental strength, the stock’s technical picture is flashing warning lights. The short-selling ratio for Lenovo has climbed above 20%, indicating that bearish bets are building even as the shares hover near their peak. The Hang Seng Index, meanwhile, opened 85 points lower at 25,953 on Wednesday after a 640-point rally the previous session, and the stock’s decline pushed it towards the 25,500 support level. Citigroup had earlier warned that extreme long positioning in Nasdaq-100 and related tech names raised the risk of a sudden pullback — a warning that has now materialised.

The share price on the European listing stood at €2.88, more than double the 50-day moving average of €1.38, a gap that screams overextension. The high of €2.90 was set on June 1, meaning the current dip has barely dented the long-term trend. Analysts see year-end targets for the Hang Seng between 28,000 and 29,600 points, which would leave room for further gains in the broader sector, provided AI demand does not cool.

Valuation: still cheaper than peers

Despite the eye-poching run, Lenovo’s valuation remains relatively modest compared with its Asian technology peers. The trailing price-to-earnings ratio stands at 19.9, above the calculated fair value of 17.7, but well below the sector average of 23.3 and a fraction of the peer-group multiple of 75.8. Morgan Stanley maintains a “hold” rating without an updated price target, suggesting the upside may now be more limited after the steep ascent.

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Shareholders also have a dividend to look forward to. The board has proposed a final distribution of 33.70 Hong Kong cents per share for the fiscal year ended March 2026. The annual general meeting will vote on the payout on July 23; the ex-dividend date is August 5, with payment on August 19. Over the past decade, the dividend has grown at a compound annual rate of 4.8%.

For now, the market is digesting an extraordinary run that has taken Lenovo from an overlooked PC maker to a central player in the AI hardware ecosystem. The pullback may prove fleeting if the autumn product launches deliver on expectations — but with short sellers circling and technical indicators stretched, the next few months will test whether the stock’s new valuation can hold.

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