The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Katrina Hamlin

HONG KONG, May 29 (Reuters Breakingviews) - A company best known for its cheap and cheerful laptops is suddenly a hot AI stock. Shares of Lenovo 0992.HK nearly doubled in the past week to value its equity at $40 billion; earnings at the U.S. and China-based group revealed strong demand for its data-centre servers. It’s part of a broader reset for unglamorous corporates who can power the back end of the boom.

Lenovo's Hong Kong-listed shares were up more than 90% as of Friday in just one week after reporting its adjusted net profit rose 101% to $559 million in the fourth quarter. While devices accounted for the bulk of its $21.6 billion revenue in January to March, infrastructure - including servers for data centres - added $5.6 billion to the top line. The unit also reversed earlier losses. Separately, Lenovo's so-called "AI laptops", which are designed to better handle AI-related tasks, are gaining some pricing power too.

Yet the swift rally has given Lenovo ample credit for the performance. Its market capitalisation is now around 17 times forward earnings – roughly the same level as U.S. giant Dell Technologies DELL.N, which is likewise a household name for personal computers and also relying on servers to power sales.

Lenovo's valuation is even starting to look rich: Dell’s own first-quarter results on Thursday were a reminder that its equivalent business is growing faster and is more profitable. Revenue from AI servers alone rocketed 757% from a year earlier to $16.1 billion in January to March, while its infrastructure unit reported a more-than-10% operating margin, versus 3.6% for Lenovo's similar segment. The unbridled enthusiasm for Lenovo may reflect the few opportunities Chinese investors have to back profitable, global AI names.

Other companies rooted in more mature, less sexy technology also have potential to pop up in the AI supply chain. Ship builder HD Hyundai Heavy Industries 329180.KS reckons it can repurpose marine engines to power data centres. Auto suppliers such as seatbelt maker Ningbo Joyson Electronic 600699.SS are starting to make parts for robots. Lenovo’s reboot will add urgency to the search for seemingly ho-hum hardware that has more to offer.

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CONTEXT NEWS

Lenovo’s net profit rose 101% to $559 million on an adjusted basis in the quarter to March 2026, excluding the impact of non-operating non-cash items and one-offs, the laptop and server maker said on May 22. Revenue rose 27% to $21.6 billion over the same period.

During intraday trade on May 29 shares touched HK$25.5, up more than 90% from May 21, the day before the results release.