Review: Lenovo in 2025

Lenovo bought its way into the PC and x86 server businesses by buying IBM’s PC business in 2005 and x86 server business in 2014. But Lenovo did not buy into the storage business, OEM’ing NetApp storage instead. It’s been generally successful with PCs and servers, and built up a storage market presence in the small and mid-range areas but not the high-end enterprise market.

How has it fared this year and where does it go next?

Lenovo’s earnings results in the year rose steadily as the Gen AI boom enlarged, with both PCs and servers reflecting this, but storage, as we see it, being less stellar.

Revenues in its third fy2025 quarter, reported in February, were up 20 percent year-on-year to $18.8 billion, with profits of $693 million, up 106 percent. The final fy2024 quarter, reported in May, saw revenues up 23 percent Y/Y to $17 billion, although profits fell 64 percent Y/Y to $90 million. They recovered in the first fy2026 quarter, to $505 million; a 108 percent jump, on revenues up 21.9 percent Y/Y to $18.8 billion.

The good news continued in the second fy2026 quarter, with a 15 percent revenue rise to $20.45 billion and profits of $512 million; 25 percent higher Y/Y.

Lenovo has a particular strength in liquid-cooled servers, with revenue from them rising 154 percent Y/Y in its most recent quarter. AI PCs accounted for 33 percent of its PC shipments, and Lenovo was number one globally in the Windows AI PC segment, with a 31.1 percent market share.

Ashley Gorakhpurwalla took over from the departed Frank Skaugan as head of Lenovo’s Infrastructure Solutions Group (ISG), which provides server, networking and storage products, in November 2024. The server side, with AI’s help, has driven ISG revenues higher. The storage side, as we understand it, has performed as well.

Lenovo agreed to buy Infinidat, with its high-end InfiniBox storage array products, in January this year, with completion of the sale by the end of the year. At the time Lenovo said it had the number one revenue position in the IDC storage market price bands 1 (<$6,000) to 4 ($50,000 to $99,999). However, it didn’t lead in bands 5 ($100,000 to $249,999) to 7 (>$500,000) and is not a major player in the enterprise storage market where Infinidat has built its business.

Since then both Infinidat and Lenovo have been studiously quiet about how the Infinidat products will be incorporated into Lenovo’s storage offerings. Lenovo has also, publicly, stopped talking about IDC storage price bands and its success within them.

As far as AI goes, Lenovo’s ThinkSystem servers and storage are active in the Nvidia AI Factory market, but Infinidat is not. It developed a RAG workflow deployment architecture in November 2024 but, since then, many of its developments have centered on cyber-security rather than AI.

We understand that Lenovo is not a significant player in the AI training storage market but could be, and should be relevant in the AI Inferencing storage business. However, it does not appear in Nvidia’s list of its AI Data Platform partners. NetApp is present, so Lenovo will be able to use NetApp’s AI Data Platform facilities, subject to the terms of its OEM agreement with NetApp.

We expect that, next year, there will be a substantial upgrade in Lenovo’s storage business activities, with focusses on Infinidat integration, and AI inferencing from datacenters to edge sites. If Lenovo moves Infinidat technology down-market then it could have offerings there which would differentiated from everyone else.

There is a move by storage players like Dell, HPE, NetApp and Pure, to offer storage systems with disaggregated compute and storage, following VAST Data and its DASE architecture. Lenovo could see if Infinidat’s technology could support such a move, and that could be a further 2026 development.