Lenovo entered the PC and x86 server markets through strategic acquisitions: it purchased IBM’s PC business in 2005 and its x86 server business in 2014. However, the company did not acquire a storage business, instead relying on OEM partnerships with NetApp to offer storage solutions. Lenovo has achieved considerable success in the PC and server sectors, establishing a presence in the small and mid-range storage market—but it has not made inroads into the high-end enterprise storage segment.
How has Lenovo performed this year, and what does its future hold?
Lenovo’s earnings have grown steadily amid the Gen AI boom, with both its PC and server businesses benefiting from this trend, though its storage business has not performed as strongly, in our assessment.
In its third quarter of fiscal 2025 (reported in February), Lenovo’s revenues rose 20 percent year-on-year to $18.8 billion, with profits jumping 106 percent to $693 million. The final quarter of fiscal 2024 (reported in May) saw revenues increase 23 percent year-on-year to $17 billion, though profits dropped 64 percent year-on-year to $90 million. Earnings rebounded in the first quarter of fiscal 2026, with profits surging 108 percent to $505 million on revenues of $18.8 billion—a 21.9 percent year-on-year gain.
The positive momentum continued in the second quarter of fiscal 2026, with revenues climbing 15 percent to $20.45 billion and profits rising 25 percent year-on-year to $512 million.
Lenovo boasts a distinct strength in liquid-cooled servers, with revenues from these products soaring 154 percent year-on-year in its most recent quarter. AI PCs made up 33 percent of the company’s PC shipments, and Lenovo ranked first globally in the Windows AI PC segment, holding a 31.1 percent market share.
In November 2024, Ashley Gorakhpurwalla took over as head of Lenovo’s Infrastructure Solutions Group (ISG)—which offers server, networking, and storage products—succeeding the departing Frank Skaugan. Fueled by AI demand, the server division has driven ISG’s revenue growth, and we understand the storage segment has performed comparably well.
In January of this year, Lenovo agreed to acquire Infinidat, a provider of high-end InfiniBox storage arrays, with the deal set to close by the end of the year. At the time of the announcement, Lenovo stated it held the top revenue position in IDC’s storage market price bands 1 (under $6,000) to 4 ($50,000 to $99,999). However, it did not lead in bands 5 ($100,000 to $249,999) to 7 (over $500,000) and is not a major player in the enterprise storage market—where Infinidat has built its core business.
Since the acquisition announcement, both Infinidat and Lenovo have remained deliberately quiet about how Infinidat’s products will be integrated into Lenovo’s storage portfolio. Publicly, Lenovo has also ceased discussing its performance in IDC’s storage price bands.
In terms of AI, Lenovo’s ThinkSystem servers and storage are active in the Nvidia AI Factory market, but Infinidat is not. Infinidat developed a RAG workflow deployment architecture in November 2024, but most of its subsequent developments have focused on cybersecurity rather than AI.
We understand Lenovo is not a major player in the AI training storage market, but it has the potential to become one—and should be a relevant participant in the AI inference storage space. Notably, Lenovo does not appear on Nvidia’s list of AI Data Platform partners. NetApp, however, is a partner, meaning Lenovo will be able to leverage NetApp’s AI Data Platform capabilities, subject to the terms of its OEM agreement with NetApp.
We anticipate that next year will bring a significant expansion of Lenovo’s storage business activities, with a focus on integrating Infinidat and advancing AI inference storage from data centers to edge locations. If Lenovo extends Infinidat’s technology to the mid-market, it could create differentiated offerings that stand out from competitors.
Storage vendors like Dell, HPE, NetApp, and Pure are increasingly offering storage systems with disaggregated compute and storage, following in the footsteps of VAST Data and its DASE architecture. Lenovo could explore whether Infinidat’s technology can support such a shift, which could be another key development for 2026.
Beijing Qianxing Jietong Technology Co., Ltd.
Sandy Yang/Global Strategy Director
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Email: yangyd@qianxingdata.com
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