According to Zhitong Finance APP, Lenovo Group (00992) briefly dropped more than 8% during intraday trading, and as of press time, it was down 6.73% to HK$22.18, with a turnover of HK$1.921 billion.
On the news front, Alphabet, Google's parent company, reported third-quarter revenue and earnings that both missed expectations, and even with somewhat "restrained" capital expenditure, its free cash flow remained negative at US$9.1 billion, marking a second consecutive quarter of negative free cash flow. Mounting doubts about whether massive AI capital investments can translate into tangible returns have weighed broadly on AI hardware stocks.
Notably, short selling in Lenovo Group has continued to expand. Data shows that its shorted shares rose from 27.178 million shares on October 22 to 35.564 million shares on October 28, an increase of 30.86%, while the short-selling amount grew from HK$643 million to HK$844 million.
A research report from Orient Securities pointed out that Lenovo Group benefits from domestic and international AI infrastructure. Some investors have limited understanding of the company's server-related business, but the report noted that the company has deep cooperation with Nvidia and others overseas and also possesses technological advantages domestically. In addition, some investors are concerned that declining shipment volumes in markets such as PCs could put pressure on Lenovo Group's performance. The report believes that the company is expected to offset the impact of sales declines through higher average selling prices, a greater proportion of high-end products, a better AI PC product mix, and procurement scale.
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