Lenovo Group (00992): King of AI application implementation, stable AI core assets

Releasing the most complete and powerful combination of AI products, Lenovo Group (00992) presented an AI feast at Tech World and stabilized China's AI core assets.

The Zhitong Finance App learned that on October 16, Lenovo Group held Tech World, an annual global technology event, and announced a series of AI products, technologies and solutions, and the vision for the next phase of Smarter AI for All. International tech giants gathered for the feast, with a rich lineup of big names, including Nvidia, Meta, AMD, Intel, Microsoft, and Qualcomm CEOs Huang Renxun, Mark Zuckerberg, Su Zifeng, Pat Kissinger, Satya Nadella, and Cristiano Anmon all arrived at the scene.

At the conference, the company showcased the most complete and strongest AI product portfolio in history, including AI devices such as AI PCs and AI mice, and products such as Lenovo AI Buddy and Home AI Brain. In addition, the company also collaborated with many international technology giants such as Nvidia, Qualcomm, and AMD to jointly develop and launch AI products and services. For example, it cooperated with Nvidia to launch the sixth-generation vertical liquid cooling breakthrough product ThinkSystem N1380 Neptune, which provided impetus for a new era of efficient computation of generative artificial intelligence, and promoted industry progress and the launch of AI terminal products.

Yang Yuanqing, Chairman and CEO of Lenovo Group, said that artificial intelligence has improved the quality of life of individuals and provided higher productivity for enterprises. Lenovo defines the future as “hybrid artificial intelligence,” believing that the enterprise basic model and private cloud will coexist with public infrastructure models and public clouds to jointly shape the future of hybrid artificial intelligence. Obviously, on the AI circuit, Lenovo Group is already at the cutting edge of the industry and has become the core asset in the AI field in China.

Technology feast, AI product portfolio leading the world

Lenovo Group's “Smarter AI for All” vision is not a slogan. The implementation of a series of AI products has proven the company's R&D strength and leading position in the AI field, and most notably, Lenovo's ability to implement AI not only in China, but globally. Even Apple's Apple Intelligence and other international giants have yet to achieve this.

(1) Leading AI implementation capabilities

At Tech World, for the public, the company's most prominent product is AI Now. This is a pioneering AI smart device that aims to transform traditional PCs into truly personalized AI devices. More importantly, after Lenovo has launched similar “Xiaotian” smart devices for Chinese users, this is a personal smart device launched for all overseas users. This is the first technology manufacturer with the ability to implement personal intelligence globally. Through Lenovo AI Now, users can get personalized, efficient, and protected experiences, thereby breaking the limits of AI PCs. AI Now revolutionizes the AI PC experience, transforming personal computing into personalized computing supported by artificial intelligence.

Looking at the landing products, such as the ThinkPad X1 2-in-1 Gen 10 Aura Edition, this is a 2-in-1 Copilot+ PC. Through this product, users can adapt to various work scenarios, such as taking notes during meetings, drawing sketches with Lenovo Yoga pens, and processing complex reports. The product streamlines workflows and protects every step of the way, from hybrid capabilities to powerful artificial intelligence enhancements, redefining hybrid work and productivity.

In addition, the company also released Learning Zone's AI learning and education platform, which supports seamless synchronization between PCs and smartphones to enhance the learning experience, enabling users to access notes, quizzes, and learning materials across devices; an AI mouse that connects users with Lenovo AI Now to provide a personalized experience; Home AI Brain, which automatically generates videos through artificial intelligence; and Smart Connect, which seamlessly integrates Motorola and Lenovo ecosystem devices to provide a unified multi-device experience.

Each AI product of the Lenovo Group is extremely scarce. It focuses on personal and corporate intelligence to provide a unique AI experience, fully demonstrating its leading level of AI technology, and is likely to become a best-selling product. In fact, the company's strength lies in its appeal and ability to integrate the supply chain, and its central position in the industry and supply chain, to ensure that its product technology always stands at the cutting edge of the industry.

(2) Strong supply chain appeal

International tech giants such as Nvidia, Meta, AMD, Intel, Microsoft, and Qualcomm participating in Tech World this time are all deep partners of Lenovo, including long-term supply chain cooperation and joint technology research and development. The tech giants mentioned above basically hold the most advanced technical level of AI in the world. It can be seen that Lenovo Group's strong appeal in the supply chain and its leading position in the industry.

Lenovo Group showcased advanced products shared with partner giants, such as the ThinkSystem N1380 Neptune, a sixth-generation breakthrough vertical liquid cooling product, in collaboration with Nvidia, which can accelerate computation for the construction and operation of generative artificial intelligence while reducing data center power consumption by up to 40%. Lenovo Neptune Liquid Cooling has always been a world leader in data center cooling technology. The new ThinkSystem solution series can provide cooling functions with up to 100% coverage. Nvidia said that the NVIDIA accelerated computing platform is the engine driving generative artificial intelligence and has defined a new industrial revolution.

In addition, Lenovo also showcased AI products launched by other partners, such as collaborating with Intel and AMD to launch AI PCs, and collaborating with Microsoft to integrate Azure AI's content security features into Lenovo's personal AI agents. At Tech World, the bosses behind these tech giants have also expressed their views on collaboration with Lenovo and AI.

Mark Zuckerberg said that Meta and Lenovo Group have joined hands to launch many outstanding innovations to bring groundbreaking AI and mixed reality technology to more people and jointly build a more intelligent future; Su Zifeng said that the cooperation between AMD and Lenovo has achieved impressive results in the data center field, providing top computing power to many enterprise customers such as Cloudflare and Paypal; Cristiano Ammon said that AI has fundamentally changed the way users interact with PCs, and collaborated with Lenovo Group by using the Snapdragon X series The computing platform's Copilot+ PCs product brings a transformative AI experience to a wide range of users.

Lenovo Group's world-leading AI product launch capabilities and strong supply chain appeal have once again upgraded the commercial value of the business. The three major business groups have fully transformed to AI, taking the lead in welcoming the AI feast in the next ten years. As the launched products continue to be commercialized, performance will continue to be unleashed.

Accelerate business deployment and comprehensive AI

Over the past few years, Lenovo Group has accurately grasped the development momentum of AI, increased investment in R&D, and promoted business transformation, and entered the AI chip field through investment and cooperation to provide technical support for the comprehensive AI transformation of the business. In 2024, Lenovo established a leading position in the field of AI PCs, pioneered the definition of the five major characteristics of real AI PCs, and launched various products in May.

The company's three major business groups include IDG, ISG, and SSG. Among them, IDG is the core business scenario for AI implementation, especially PC products. As the world's first manufacturer to launch AIPC, it continues to consolidate its leading global position in the PC field, while opening up a new cycle and growth space for the PC industry.

According to Canalys data, in 2024, Lenovo's AIPC shipments surged 228% month-on-month, significantly superior to 127% of the industry. Driven by high AI PC growth in Q3, Lenovo continued to lead the global growth in PC shipments. Global shipments were 16.49 million units, with a market share of 24.8%, which was 4.4 percentage points and 10 percentage points higher than Dell, which ranked second and third, respectively. The market gap widened year by year.

ISG is on its way to a healthy channel for growth and profit. The rapid iteration of large AI models is generating massive computing power demand. At the same time, the company's AI server segmentation circuit continues to receive high growth. At the same time, the company has built a “one horizontal and five vertical” AI-oriented infrastructure layout to help build computing power. Benefiting from growing market demand and strong technical and product reserves, ISG's profits are gradually improving. SSG has the characteristics of high growth and high profit margins, and has maintained double-digit performance growth. Its DynaSky helps TruScale build full-stack capabilities, and hybrid AI capabilities empower enterprise users to fully transform.

The three major businesses of the Lenovo Group all have strong performance resilience and growth capacity under AI transformation. On the one hand, the company continued to invest in R&D. In Q1 of fiscal year 2025, R&D expenses were US$476 million, up 5.5% year on year, and the R&D cost rate was 3.08% to ensure product strength and leading position in the industry; on the other hand, supply chain integration capabilities continued to reduce costs, especially long-term partnerships with international technology giants to ensure stable AI production capacity and market supply.

Leading the world and being recognized by institutional investment banks

Lenovo Group is leading the world in AI products and technology. As the AI wave continues to advance, in this artificial intelligence competition, the company has always been at the forefront of the industry with its R&D advantages and has taken the lead in AI in China, and the company has also been recognized by major institutions and investment banks.

The big news for the company this year was that it was favored by the Saudi Sovereign Wealth Fund. This year, Alat will provide Lenovo Group with an investment of 2 billion US dollars in interest-free convertible bonds. This move will not only introduce long-term partners and international investors to guarantee the expansion of the Middle East region, but also provide financial support to the company and continue to promote AI research and development and the launch of localized products in the Middle East. Yang Yuanqing said that after the establishment of this strategic cooperation, Lenovo's Middle East business will grow from 1.2 billion to 6 billion US dollars within 3 years, and will save about 110 million US dollars in interest every year.

It is worth mentioning that Yang Yuanqing has continued to increase his holdings of Lenovo. According to Easy Disclosure, Yang Yuanqing's position changes increased by 16.611,500 shares on June 3 this year, the holding ratio increased to 7.72%, and the shareholding ratio increased to 12.15% on July 15. In July, the company announced approval to issue subscription certificates. Yang Yuanqing agreed to subscribe for 220 million warrants, accounting for about 19.13% of the total number of warrants issued.

The Lenovo Group has also been favored by major brokerage investment banks. Since August, more than 10 investment banks have published optimistic research reports. Among them, Haitong Securities Research believes that Lenovo's PC sales are among the highest in the world. With AIPC iteration and accelerated penetration, the PC market recovers, and issues in the upstream GPU supply chain of servers are mitigated, the company is expected to begin new growth. Looking at the target price ratings of major investment banks, the average price is HK$13, which is more than 20% premium compared to the current price.

Overall, at Tech World, Lenovo Group showcased the world's most complete AI product portfolio. Its industry-leading technical level and strong supply chain appeal all brought unprecedented fame to its AI commercialization, and the company's three major businesses gradually achieved AI transformation. Among them, AI PC took the lead in the industry, stabilizing its leading position in the global PC market. As the core asset of China's AI, Lenovo Group is bound to become a “potential stock” for the next ten years.