(Bloomberg) — Lenovo Group Ltd.’s shares fell their most in additional than a month after reporting a worse-than-expected 64% drop in earnings, reflecting aggressive pressures within the AI server and PC markets.
The Chinese firm reported web revenue of $90 million for the March quarter versus projections for greater than $200 million, reflecting a loss on derivatives and pricing pressures in a stagnant PC market. Its inventory slid as a lot as 5.4% in Hong Kong, regardless of a faster-than-anticipated 23% rise in gross sales to about $17 billion.
Lenovo and its rivals are grappling with uncertainty about whether or not demand for PCs and AI servers will maintain up if the worldwide economic system wobbles. The Trump administration has initiated commerce probes as a precursor to imposing tariffs on a broad vary of semiconductors and electronics, threatening to upend the worldwide tech provide chain.
For now, the US has exempted semiconductors, cellphones, computer systems and different electronics imports from 145% duties utilized to China. That announcement was seen as a boon to tech giants like Apple Inc. and Nvidia Corp., however Trump and his advisers shortly mentioned the aid could be short-lived and that separate levies could be positioned on chips.
“We definitely are not worried about the tariffs, but we are worried about uncertainty,” Chief Executive Officer Yang Yuanqing informed Bloomberg News. “For the longer term, the PC market is related to the global economy, whether it’ll be impacted by tariffs or geopolitical tension.”
In PCs, Lenovo cemented its lead over HP Inc. and Dell Technologies Inc. within the first quarter, when it grew worldwide shipments nearly 11%, based on IDC. Investors stay centered on AI server demand, given uncertainty concerning the macroeconomic outlook and sustainability of the unreal intelligence increase.
A gradual restoration within the PC market ought to proceed within the present quarter, Yang mentioned.
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Lenovo Group, earnings drop, AI server, PC market, world economic system
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