Lenovo Shares Rebound Over 4% as Blowout US Earnings Revive AI Trade; Citi Says ISG Remains Key Profit Engine

Stock News09:42

Lenovo Group Ltd (00992) rebounded more than 4%, rising 4.12% to HK$26.3 as of press time, with turnover of HK$492 million.

On the news front, SpaceX and Super Micro Computer both recently released earnings that beat market expectations, boosting confidence in the AI trade. In the third quarter, SpaceX's AI revenue grew more than ninefold year-on-year to US$7.56 billion, becoming the company's largest revenue source for the first time. Super Micro Computer expects revenue for the quarter ending September 30 to surge 279% year-on-year, about 27% above its previous guidance, with gross margin also rising to 12%-12.5%.

Boosted by this, US AI-trade concept stocks rose across the board in after-hours trading, with Dell Technologies up more than 6% and emerging cloud computing company CoreWeave up more than 4%.

Citi recently noted that recent market concerns about highly leveraged AI infrastructure operators have triggered volatility in the AI supply chain, but Lenovo Group's direct exposure to high-risk new cloud customers remains limited, and its prudent risk controls and comprehensive accounts receivable insurance can ease balance sheet concerns. The bank expects ISG to remain the main profit engine, with second-quarter revenue up 135% year-on-year and operating margin maintained at 9%.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment