Lenovo sidestepped the sting of rising memory prices by steering its PC lineup toward premium devices. The strategy paid off handsomely in the company's fourth fiscal quarter, with revenue from its Intelligent Devices Group jumping 23% to $14.6 billion.

Operating profit in that segment hit just over $1 billion, up 20.7% from a year earlier. PC and smart device sales alone grew 26%. Lenovo now commands 24.4% of the global PC market.

The memory crunch has been brutal. DRAM and NAND flash prices doubled or even quadrupled earlier this year as chipmakers prioritized AI server memory over consumer supply. Corporate buyers rushed to purchase PCs before costs climbed further, but Lenovo's CEO Yang Yuanqing said the company avoided that pull-forward trap.

Lenovo Sidesteps Memory Price Pain

“We shifted our mix towards premium to improve average unit revenue, and our PC shipment growth continued to outperform the market,” Yang said on an earnings call. He added that the company promised to maintain revenue momentum despite rising component costs. “We delivered.”

Lenovo’s total fourth-quarter revenue hit a record $21.6 billion, up 27% year on year. For the full fiscal year, revenue reached $83.1 billion and net profit totaled $1.91 billion.

The shift to premium machines means Lenovo expects unit shipments to decline in fiscal 2027. But average unit revenue is expected to rise, squeezing more profit from fewer sales. That spells trouble for budget-conscious buyers: cheaper PCs will become harder to find as Lenovo prioritizes higher-margin devices.

AI Ambitions Across the Product Line

Yang pledged to embed artificial intelligence across every product category. Lenovo is developing “personal AI super agents” called Tianxi and QIRA. Tianxi acts as a private AI assistant for writing, summarizing and settings on a single computer. QIRA moves across Lenovo and Motorola devices, learning from user behavior and helping complete tasks.

The company also plans next-generation AI-native PCs, smartphones, wearables and “personal computing hubs.” Whether customers embrace all this AI remains an open question.

Why This Matters

For everyday PC buyers, Lenovo’s premium pivot means fewer affordable options. The company’s focus on high-end devices — driven by inflated memory costs and AI ambitions — will likely raise the average price of a new laptop or desktop. Enterprise customers may face tighter supply for budget models as Lenovo aligns shipments with real demand to keep inventory healthy.

The memory price spike also highlights a broader trend: chipmakers chasing AI server profits can starve the consumer market, forcing PC makers to adapt. Lenovo’s strategy shows one way to survive, but it leaves cost-sensitive users with fewer choices.