LENOVO GROUP reported better-than-expected revenue for the previous fiscal quarter, driven by strong demand for preemptive personal computer purchases ahead of anticipated memory chip price increases, alongside robust performance in its artificial intelligence (AI) server business.

The company announced an 18% increase in revenue for the quarter ended last December, reaching $22.2 billion, surpassing the average analyst estimate of $20.8 billion. However, net profit declined by 21% year-on-year.

According to data from research firm IDC, overall PC market shipments grew by 9.6% in the previous quarter, with LENOVO, HP, and Dell all recording double-digit growth in shipments.

Holiday promotions and preemptive buying ahead of expected price hikes are boosting the PC industry. The AI boom has led to tight supplies of consumer electronics components, such as memory chips. While industry leaders are better positioned to negotiate priority supply, the global shortage is expected to increasingly impact profit margins in the coming months.

Analysts at UOB Kay Hian noted in a report, "We anticipate this front-loaded demand will continue into the first quarter. However, as inventories purchased at lower prices are depleted in Q1, further price increases are likely, which could eventually affect end-user demand."

Benefiting from the surge in AI infrastructure investment, LENOVO's Infrastructure Solutions Group, which handles servers and storage hardware, saw quarterly revenue rise by 31% to a record high of $5.2 billion.