Lenovo Shares at Crossroads: DCF Says Fair Value Hit, Macquarie Sees 37.40 HKD Upside

Lenovo stock up 95% in a month on AI server boom; Macquarie raised target 72% to 37.40 HKD, but RSI above 75 and fair value analysis suggest overbought.

The spectacular rally in Lenovo’s stock has reached a fork in the road. One the one hand, a detailed discounted cash flow analysis published on June 4 pegged the fair value at around 25.42 Hong Kong dollars, barely above the then-market price of 25.00 HKD. On the other, Macquarie just raised its price target by a stunning 72 percent to 37.40 HKD, arguing that the AI server boom is only just beginning. The gap between the two valuations captures the tension gripping the stock after a nearly 100 percent run in a single month.

That monthly surge — roughly 95 percent on a 30-day basis — has left technical indicators flashing red. The relative strength index sits at 75 to 77, firmly in overbought territory, while the stock’s annualized 30-day volatility of over 105 percent reflects a market no longer treating Lenovo as a staid PC maker but as a high-beta AI hardware play. From its 52-week low of 0.93 euro in January, the price has more than tripled, closing at around 2.58 to 2.62 euros on Friday. The 50-day moving average of 1.48 euro now sits more than 74 percent below the current level.

Underpinning the rally is a fundamental transformation in Lenovo’s business mix. For the fourth fiscal quarter, revenue hit $21.6 billion, up 27 percent year over year, while adjusted net income doubled to $559 million. Full-year revenue climbed to $83.1 billion, with adjusted net earnings rising 42 percent to $2.0 billion. The Infrastructure Solutions Group was the standout: quarterly revenue jumped 37 percent to $5.6 billion, and the division swung to an operating profit of $202 million. The pipeline for AI servers alone has swelled to $21 billion, with more than 5,800 customer deployments completed.

That pipeline is now translating into visible, high-profile projects that take Lenovo beyond its traditional PC and server base. Together with Invisionary Media and Intel, the company recently unveiled an AI-powered fan engagement platform for Newcastle United, powered by the LUX-75 display and ThinkStation P5. And for the FIFA World Cup 2026 in Dallas, Lenovo will equip the International Broadcast Center with servers, deploying over 17,000 Lenovo and Motorola devices and more than 200 engineers across venues. The infrastructure is designed to deliver IPTV broadcasts with less than five seconds of latency and feed over 1,000 screens in FIFA facilities. While these announcements don’t immediately alter financial forecasts, they showcase how Lenovo is embedding AI and edge computing into real-world stadiums and events.

Macquarie’s upgrade lands against this backdrop. The bank points to the infrastructure division’s return to profitability and an order book that now exceeds supply. “Customers want more AI servers than the market can deliver,” the note argues, which should support both pricing and margins. Looking ahead, Lenovo plans to strike in the high-end segment in the second half of 2026 with timely deliveries of Nvidia’s next-generation GB300 and Vera Rubin servers. That could secure further market share and justify the bank’s 37.40 HKD target.

For now, the stock is caught between two narratives. The DCF analysis suggests the rapid price gain has already priced in much of the good news, leaving little margin of safety. The RSI and volatility numbers reinforce the risk of a pullback. But Macquarie’s radical target implies that if Lenovo can sustain its infrastructure momentum and capture the next wave of AI hardware demand, today’s levels could look cheap in hindsight. The next catalyst — concrete signs of margin improvement in the infrastructure business or a major new order from that $21 billion pipeline — will determine which side wins out.