Lenovo Group reported its strongest quarterly revenue growth in five years, sending shares sharply higher on Thursday as the world’s largest PC maker benefited from surging demand for artificial intelligence infrastructure, strong device sales and its ability to manage a global shortage of memory chips.

Revenue rose 43% year over year to $26.94 billion in the three months ended June 30, far exceeding the $22.3 billion expected by analysts, according to LSEG data.

Lenovo shares jumped as much as 22% after the results, extending a remarkable rally that had already pushed the stock to an all-time high before the earnings announcement. The shares were up about 225% so far this year.

The results highlight a significant shift in Lenovo’s business mix, with AI-related products and infrastructure becoming a much larger driver of growth. Revenue from AI-related businesses increased 60% from a year earlier to $9.3 billion, accounting for about 35% of total revenue in the fiscal first quarter.

Chief Executive Yang Yuanqing said Lenovo had anticipated the tightening supply of memory chips and rising component costs and took steps to protect its operations.

“We accurately anticipated supply shortages and cost increases (of memory chips), and addressed it successfully,” Yang told Reuters.

He attributed the company’s ability to manage the supply shock to its scale, resilient global supply chains and diversified sources of memory chips from China, South Korea and the United States.

“I’m very confident in sustaining this growth momentum and driving long term profitability,” Yang said, adding that Lenovo remains on track to generate $100 billion in revenue during the current fiscal year.

The company’s bottom line, however, was significantly weaker because of a large non-cash accounting charge. Lenovo reported a net loss attributable to shareholders of $609 million, compared with a profit of $505 million a year earlier and an analyst expectation for a $589 million profit.

The company said the loss was primarily caused by a $1.7 billion non-cash fair-value loss resulting from the revaluation of warrants issued in 2025.

Excluding one-time items and non-cash charges, adjusted net income more than doubled to $1.075 billion. Research and development spending also increased 30% from a year earlier as Lenovo invests in its AI portfolio.

AI Infrastructure Becomes A Major Growth Engine

Lenovo’s expansion into AI infrastructure is becoming increasingly important to its financial performance. The company said its AI server pipeline reached $54 billion, an increase of 157% from the previous quarter. The pipeline includes demand from hyperscalers, AI cloud providers and enterprise customers deploying AI systems.

The scale of that pipeline suggests Lenovo is increasingly competing beyond the traditional PC market and positioning itself as a supplier of the hardware required to build and operate AI computing infrastructure.

“It’s clear that we are becoming a global AI infrastructure leader as well,” Yang said.

Lenovo’s opportunity comes as companies worldwide continue to increase spending on servers, computing systems and networking equipment to support generative AI and other advanced workloads. That expansion has created a new growth market for hardware manufacturers that previously relied heavily on PCs and other consumer devices.

The company’s ability to participate in both markets also provides diversification. Its traditional devices business continues to generate substantial revenue, while AI servers and related infrastructure are becoming a faster-growing part of the portfolio.

Memory Shortage Reshapes PC Market

Lenovo’s performance also illustrates how the global memory shortage is changing the economics of the PC industry. Revenue from Lenovo’s PC, tablet and smartphone division rose 27% year over year and accounted for about 64% of total group revenue.

Yet global PC shipments declined 2% year over year in the second quarter to 16.6 million units, according to Counterpoint Research. It was the first annual decline in global PC shipments since the first quarter of 2025.

The decline reveals the pressure created by higher prices for NAND and DRAM memory chips, which have increased manufacturers’ costs and pushed up retail prices.

Lenovo has raised PC prices twice this year to offset those higher component costs. U.S. rivals Dell, Hewlett Packard Enterprise and Super Micro have also increased prices, with some increases ranging from 10% to 30% as memory costs surged.

Yang said Lenovo expects the pressure on PC volumes to continue during the second half of the year.

“We believe this will still be the trend in the second half of this year,” he said.

However, declining unit shipments do not necessarily translate into falling revenue. Manufacturers can offset weaker volumes through higher average selling prices and by moving customers toward more expensive products.

“From a unit point of view, (PC) demand will be constrained, but because every average selling price is going higher or we are shifting to a premier price band, that helps us drive revenue growth,” Yang said.

Lenovo is also trying to expand beyond traditional PCs by developing AI-enabled personal computers and edge-computing devices capable of running AI models locally. The shift could open a new product cycle as consumers and businesses increasingly seek devices capable of running AI applications without relying entirely on cloud-based computing.

Overall, Lenovo’s latest results show a company undergoing a broader transformation.

The PC market remains its largest business, but AI infrastructure is rapidly becoming a major source of incremental growth. At the same time, higher component prices are forcing Lenovo and its competitors to raise device prices and push customers toward premium products.

That creates both an opportunity and a risk.

Lenovo’s scale and diversified supply chain appear to have helped it navigate the current memory shortage better than some competitors. But sustained shortages could eventually constrain demand, particularly if higher prices make PCs less affordable for consumers and businesses.

The company’s expanding AI server pipeline offers a potential counterweight. A $54 billion pipeline, if converted into actual orders and revenue at a healthy rate, would give Lenovo a much larger role in the infrastructure spending cycle that has benefited chipmakers, server manufacturers and networking companies.

The sharp rise in research and development spending also shows that Lenovo is investing to capture that opportunity rather than simply benefiting from higher hardware prices.

For now, investors appear to be rewarding the combination of strong revenue growth, accelerating AI demand and resilient PC sales.  But the company’s target of reaching $100 billion in annual revenue suggests management expects the AI hardware boom to become a structural growth driver rather than a temporary boost. Thursday’s results provide early evidence that the strategy is gaining traction.

Bank of America is set to acquire as much as a 49.9% stake in Jio Financial Services’ non-bank lending business for 182.68 billion rupees ($1.92 billion), strengthening the U.S. bank’s exposure to India’s rapidly expanding financial-services market.

The agreement announced Wednesday will make Bank of America a joint-venture partner in Jio Credit, a non-banking financial company (NBFC) that has expanded rapidly since beginning operations two years ago.

Under the transaction, BofA will initially acquire a 26.5% stake through a preferential allotment of equity shares and warrants. Its ownership could rise to 49.9% if the warrants are fully exercised.

The deal values Jio Credit at about $3.8 billion, based on a Reuters calculation.

Jio Credit will issue up to 66.13 billion rupees of equity shares and up to 116.55 billion rupees of warrants to Bank of America. The transaction remains subject to regulatory approvals.

The investment gives Bank of America access to Jio’s rapidly expanding lending platform and customer base without amounting to a direct expansion of its retail banking operations in India.

A BofA spokesperson told Reuters that the transaction is not a retail banking expansion in the country. Instead, the partnership combines Jio Financial’s domestic distribution and digital infrastructure with BofA’s international financial-services capabilities.

“By combining Jio Financial Services’ scale, local expertise and customer base with Bank of America’s global reach, digital experience and close to 250 years of leadership in banking, we can help expand access to financial services and support India’s continued economic growth,” BofA CEO Brian Moynihan said.

The structure is significant because India’s financial sector is increasingly attracting international capital as demand for credit, payments, insurance and investment products grows alongside the country’s expanding economy.

Jio Credit has emerged as one of India’s fastest-growing NBFCs. Its assets under management exceeded $3 billion as of the end of June, only two years after the business began operating. That growth gives BofA exposure to a financial platform that is still in an early expansion phase rather than an established lender with a mature balance sheet.

Jio Financial Services was listed in 2023 following its demerger from billionaire Mukesh Ambani’s Reliance Industries. Since then, the company has expanded beyond lending into several areas of financial services, including digital payments, insurance broking and asset management. Its strategy is built around leveraging the enormous customer ecosystem associated with the broader Reliance group and using digital distribution to scale financial products.

Jio Financial has been pursuing partnerships with major international financial institutions as it develops that ecosystem. The company operates asset and wealth-management ventures with BlackRock, the world’s largest asset manager. It has also established a joint venture with Germany’s Allianz to offer general and health insurance products.

The BofA transaction therefore adds another major global financial institution to Jio Financial’s growing network of international partners.

The deal also comes amid a broader increase in foreign investment in India’s financial sector.

Japanese financial conglomerate MUFG has invested in Shriram Finance, while Dubai-based Emirates NBD has agreed to acquire a 60% stake in RBL Bank.

The interest reflects the scale of India’s financial opportunity. The country’s large population, expanding middle class, growing digital-payment ecosystem, and increasing demand for consumer and business credit have created significant room for financial institutions to expand.

NBFCs are particularly important because they can provide credit to segments of the economy that may not be fully served by traditional banks.

BofA’s investment shows that international banks can participate in India’s financial growth without building a conventional retail banking operation from the ground up. Rather than competing directly for retail deposits and branches, BofA is taking a substantial strategic position in a fast-growing domestic lending platform.

The initial 26.5% ownership gives BofA significant exposure to Jio Credit, while the warrants provide a route to nearly half of the company if exercised.

An emerging advertising format designed specifically for artificial intelligence agents is facing an early test after Perplexity moved to prevent the ads from influencing its AI systems, raising questions about whether publishers can turn chatbot visibility into a new advertising market.

Brands including Ally Bank and the Project Management Institute have been testing the format on Time’s website through an initiative designed to present advertisements directly to AI crawlers rather than human readers.

The experiment has opened a broader debate across the advertising industry over whether so-called “Agent Ads” can become a viable marketing channel or whether AI companies will block the practice as an attempt to manipulate their search and answer systems.

Perplexity has already taken a hard line.

The AI search company has begun preventing the advertisements from influencing its models, according to Digiday. Perplexity also warned publishers that running what it considers “deceptive advertising” could lead to lower rankings in its search index.

At the center of the dispute is a fundamental question about how information should be presented to AI systems. Time has created stripped-down, text-only versions of some webpages intended specifically for AI agents. The publisher directs AI crawlers toward those versions rather than the pages designed for human visitors.

It then partnered with adtech company Mobian to place “Agent Ads” on the AI-readable pages.

Unlike conventional display advertising, the ads appear as blocks of FAQ-style text containing current facts about the advertiser. The format is intended to provide information that an AI system can read, process, and potentially incorporate into an answer.

The underlying strategy is that if an AI system retrieves information from a respected publisher, the advertiser may have a greater chance of being accurately represented when users later ask a chatbot about the company or its products. That could become more valuable as consumers shift from traditional search engines toward AI assistants for product research, recommendations and factual queries.

Jonah Goodhart, chief executive of Mobian, defended the approach, saying the advertisements are clearly labeled and contain cited, verifiable information that AI systems can decide whether to use.

“This is the opposite of deception,” Goodhart said.

Perplexity disagrees.

Jesse Dwyer, a spokesman for the company, said providing one version of a webpage to human visitors and another to AI systems amounts to “cloaking,” a practice that traditional search engines have historically penalized.

“You can’t just rebrand spam,” Dwyer said. “If the ads are so helpful, why not just put them right on the site for everyone to see?”

The disagreement exposes a potentially important fault line in the emerging AI advertising economy.

Traditional search advertising works largely because users can see the advertisements and distinguish them from organic results. AI systems introduce a different environment. A chatbot may absorb information from a webpage and present it in a synthesized answer without showing users exactly which portions of the source influenced its response.

That creates an incentive for marketers to optimize content specifically for machines, potentially producing a new form of search-engine optimization aimed at AI models rather than people. It also creates a significant governance problem for AI companies. If paid promotional material is deliberately structured to resemble ordinary informational content, platforms must determine whether it should be treated as advertising, useful data, spam, or an attempt to manipulate model outputs.

Perplexity’s response suggests that at least some AI companies intend to apply existing anti-manipulation principles to the new format.

The stakes could rise as AI search becomes more commercially important. If consumers increasingly rely on systems such as ChatGPT, Gemini and Perplexity to research brands and make purchasing decisions, appearing in an AI-generated answer could become as valuable to marketers as appearing prominently in conventional search results. That could create a new competition among publishers, advertisers and AI platforms over who controls the information that models consume.

Time’s position is that the industry needs to develop standards rather than simply reject the concept.

Mark Howard, Time’s chief operating officer, said the publisher had contacted Perplexity and looked forward to “a constructive dialogue about the standards and safeguards that will allow advertising and AI to develop responsibly together.”

The Project Management Institute is taking a similarly experimental approach. Menaka Gopinath, its chief marketing officer, described the organization’s work with Time as part of a “learning journey” aimed at understanding how information about project management, professional skills and career development appears in AI-driven environments.

For advertisers, the immediate value may therefore be less about direct sales and more about learning how AI systems discover, interpret and reproduce information about brands. That distinction could be important because AI advertising remains an immature market, and advertisers do not yet have the same established measurement systems for chatbot visibility that exist for conventional digital advertising.

But the dispute with Perplexity shows that the industry may face an even more basic obstacle: AI platforms control the systems that marketers are trying to influence.

A publisher can create content designed for AI crawlers, but an AI company can decide whether that content enters its search index, influences its models, or appears in its answers. That gives AI platforms significant power over the emerging market.