"Company leadership thinks it can finally set ISG on a course to profitable growth by "optimizing Enterprise SMB business models to better serve the distinct needs of enterprise and SMB" and thinks increased demand for inferencing workloads will help increase demand for its wares. For now, Lenovo is largely content with its sales to hyperscalers, pointing to 154 percent growth in sales of liquid-cooled systems."
"Chairman and CEO Yuanqing Yang joined the ranks of industry execs dismissing talk of an AI bubble. "The substantial investments in AI infrastructure are laying the groundwork for the next major technology wave, much like the early internet era," he said, noting how that wave delivered "explosive growth in PCs" and gave rise to the smartphone industry. "What's happening now is the next wave of AI democratization, spreading across both personal and enterprise use, which is perfectly aligned with Lenovo's strategy," Yang said."
Lenovo posted $20.5 billion in second-quarter revenue, a 15% year-over-year increase, with profit of $380 million, down 1%. The Infrastructure Solutions Group (ISG) generated $4.1 billion, up 24% year-over-year, but recorded a $32 million loss. ISG traces back to Lenovo's 2014 acquisition of IBM's x86 server business and has alternated between small profits and modest losses since briefly returning to profitability in 2022. Management intends to optimize enterprise and SMB business models and anticipates growing demand for inferencing workloads. Sales to hyperscalers remain strong, including 154% growth in liquid-cooled system sales. Corporate messaging positions AI infrastructure investment as a foundation for broad future demand.
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