Hardware stocks jump thanks to server demand and record Lenovo revenue

Hardware stocks surged Friday as Lenovo's record quarterly revenue and 84% growth in AI-related revenue drove its stock up 19% to an all-time high. The rally extended to Dell, Super Micro Computer, and Hewlett Packard Enterprise as investors bet that strong server demand, fueled by AI computing needs, will boost the broader hardware sector.

Hardware stocks jump thanks to server demand and record Lenovo revenue Server stocks are rallying as Dell https://robinhood.com/us/en/stocks/DELL/?source=sherwood , Super Micro Computer https://robinhood.com/us/en/stocks/SMCI/?source=sherwood , and Hewlett Packard Enterprise https://robinhood.com/us/en/stocks/HPQ/?source=sherwood ride the momentum of Hong Kong-based Lenovo. The PC maker’s stock rose 19% on Friday, hitting an all-time high, on record Q4 earnings. Powering the positive earnings report was the company’s AI-related revenue, which grew 84% in the fourth quarter and now makes up over a third of total revenue. Investors seem to think the increased demand for servers could have trickle-down effects for other companies. “The company’s results and commentary reinforced the outlook for strong AI-infrastructure demand while indicating resilient broader traditional server and storage spending,” wrote Woo Jin Ho, a senior technology analyst at Bloomberg Intelligence. “Lenovo’s $21 billion AI-server pipeline and remarks that demand is outpacing supply support Dell’s AI-demand momentum and point to robust orders.” AI’s insatiable computing demand is reshaping the hardware industry and driving up server demand. Dell will report first-quarter earnings on Thursday, May 28.