Lenovo’s Price Hikes and Goldman Upgrade Collide with Profit?Taking After Record Results
04.06.2026 - 16:51:36 | boerse-global.de
The day after Lenovo unveiled its strongest?ever annual figures and a fresh set of price increases, investors did the opposite of what the news cycle suggested. Shares in the Chinese tech giant tumbled 12.75% to €2.43 on Thursday, paring a year?to?date gain that still stands at roughly 130?145%. The sell?off came even as Goldman Sachs lifted its price target to HK$31 and reiterated a “Buy” recommendation, calling the company a clear beneficiary of the artificial?intelligence hardware boom.
The disconnect between the analyst optimism and the market’s reaction underscores a familiar tension after a blistering rally. Lenovo’s stock hit an all?time high of €2.96 on 1 June, meaning even after Thursday’s plunge it remains 18% below that peak and is still up 160% from its January low of €0.93. Earlier in the session, the stock had been down about 7% to €2.58 before extending losses, suggesting a wave of profit?taking rather than a fundamental reassessment.
Record quarter and an AI?fuelled year
The sell?off came against a backdrop of stellar numbers. In the fourth quarter of its fiscal 2025/26, Lenovo generated $21.6 billion in revenue, a 27% year?on?year increase that marked a new quarterly record. Adjusted net profit doubled to $559 million. For the full year, revenue hit $83.1 billion – another historic high. The engine behind that growth is unmistakable: AI?related revenue jumped 84% in the quarter and now accounts for 38% of total group sales. The Infrastructure Solutions Group (ISG) swung back to profitability, helped by a $142 million improvement in operating profit and a record annual revenue of $19.2 billion. The AI server pipeline stood at $21 billion by year?end, with shipments of NVIDIA GB300 servers already under way and the Vera Rubin platform expected in the second half of 2026.
Should investors sell immediately? Or is it worth buying Lenovo?
Price hikes for PCs and smart devices
Yet Lenovo is not resting on its laurels. The company began raising prices on 4 June for custom?configured products in its Intelligent Devices Group (IDG), which covers PCs, laptops and smart devices. A second round of increases, focused on “top?seller” items including education technology, is scheduled for 1 July. In an internal memo, Wade McFarland, vice?president for North American channel sales, explained that the staggered approach is designed to support the current quarter’s sales momentum and minimise disruption in the channel. The moves do not affect Lenovo’s infrastructure or services divisions.
Goldman calls for further upside
Goldman Sachs’ upgraded target of HK$31 implies meaningful upside even after the recent pull?back. The bank raised its net?profit estimates for the 2027?29 fiscal years by 4.3% and 6% respectively, and sees operating margin expanding to 3.8%. Average earnings growth of 25% a year in fiscal 2027 and 2028 is fuelled by three themes: the ISG infrastructure business, AI server demand, and the rollout of AI?powered PCs. New chip platforms from Intel, AMD and Qualcomm are expected to drive the next upgrade cycle. On the PC side, NVIDIA announced that Lenovo will begin shipping laptops with RTX Spark technology this autumn, and Microsoft confirmed the Yoga Pro 9n model using NVIDIA’s latest chip.
Overbought signal and execution risk
From a technical standpoint, the recent correction looks overdue. The relative strength index (RSI) stood at 75, territory that typically signals an overbought condition. The price increases themselves carry two?edged risk: they could lift margins if demand holds, but they might also push price?sensitive customers toward competitors. The next chapter for Lenovo will depend not on the AI label but on execution. ISG must sustain its operational turnaround, and AI?PCs need to command premium?segment margins. Until then, the market may continue to take profits on a stock that has more than doubled in twelve months.
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