Lenovo Stock Doubles in May, Leading Hang Seng with 159% Annual Gain on AI Backbone

The rally in Lenovo Group has reached warp speed. By Friday's close in Hong Kong, the stock had surged 21.95% to 24.00 HK-dollars, touching an intraday high of 25.70 HK-dollars – a fresh 52-week peak. Trading volume exploded to 721.92 million shares. The double-digit advance capped a month that saw the shares more than double: a 109% gain in May alone, the strongest monthly performance since 1999.

That torrid pace has propelled Lenovo to the top of the Hang Seng Index, with a 159% year-to-date return that leaves even runner-up Contemporary Amperex Technology (up 47%) in the dust. Frankfurt-listed shares followed suit, closing at €2.67 for a 22.76% daily gain and a 152.96% rise since January.

Behind the euphoria lies a hardened earnings story. For the fourth quarter of its 2025/26 fiscal year, Lenovo reported revenue of $21.6 billion, a 27% year-on-year increase and the fastest quarterly growth in five years. Adjusted net income nearly doubled to $559 million. Over the full year, revenue hit a record $83.1 billion, up 20%, while adjusted profit climbed 42% to $2.0 billion.

The engine is artificial intelligence. AI-related revenue surged 84% in the quarter to account for 38% of total sales; for the full year, the share was 33%. The company's AI server pipeline now stands at $21 billion, with more than 5,800 active customer projects. The Infrastructure Solutions Group – the segment housing much of the AI hardware – posted full-year revenue of $19.2 billion, up 32%, and swung to an operating profit of $73 million, reversing a loss.

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

Segment-level numbers for the fourth quarter show broad-based strength: Intelligent Devices Group contributed $14.6 billion, Infrastructure Solutions Group $5.63 billion (up 37%), and Solutions and Services Group $2.56 billion. CEO Yuanqing Yang has set a target of breaking through $100 billion in annual revenue within two years, with AI infrastructure as the primary driver. In April, Lenovo acquired storage specialist Infinidat to bolster its enterprise-storage margins, and it is already shipping the Nvidia GB300 NVL72 platform. A next-generation system based on Nvidia's upcoming Rubin architecture is slated for the second half of the 2026 calendar year.

Yet investors are beginning to question whether the price has run ahead of the fundamentals. The stock's relative strength index has climbed to 76, a classic overbought signal, and the annualized 30-day volatility has surged past 100%. The 109% monthly gain raises the bar for any future earnings beat. On the operational side, Lenovo warns that tight memory-chip capacity and rising storage costs will persist through fiscal 2026, while PC unit volumes are expected to decline – though management hopes higher average selling prices will compensate. The company retains a commanding 24.4% global market share in PCs.

Chart watchers have set key levels: the intraday high of 25.70 HK-dollars serves as resistance, while Friday's low at 22.62 HK-dollars marks immediate support. A slip below that threshold could signal that the revaluation is complete for now – not that the AI thesis is broken.

Lenovo at a turning point? This analysis reveals what investors need to know now.

A string of corporate events will test momentum. The annual general meeting is scheduled for July 23, where a final dividend of 0.340 HK-dollars per share will be put to a vote. Combined with the interim payout, the full-year dividend reaches a record 0.422 HK-dollars per share. Shares go ex-dividend on August 5, with payment on August 19. The next quarterly results are due on August 13 – the first real litmus test of whether Lenovo can sustain its blistering growth trajectory.

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