CMB International claimed that AI PCs will become the mainstream model by 2026. Lenovo (00992) is relying on its memory strategy to stockpile and defend against the competition.

This week, CICC International released its annual strategy, stating that the penetration rate of AI PCs is expected to exceed in 2026, and the optimization of product portfolio is expected to offset the impact of cost increases. The report predicts that by 2026, AI PCs will accelerate penetration and become mainstream standard models. Lenovo (00992) stated that AI PC shipments accounted for 33% in 3Q25, and is expected to maintain double-digit growth in the coming quarters. With the popularity of Intel Lunar Lake/Arrow Lake, AMD Ryzen AI, and Qualcomm X Elite chips, NPU will become a standard feature. Although killer applications are still in the incubation stage, consumer interest in AI capabilities is on the rise. With AI PCs equipped with higher-spec memory and stronger cooling modules, product prices are expected to increase. Looking ahead to 2026, the report predicts that brand manufacturers will offset some of the cost pressures from the rise in memory prices by offering high-end product combinations through AI PCs, thus increasing the average selling price. Specifically, LENOVO GROUP: Short-term impact of memory strategy is low, AI PC market share at 31% Lenovo's performance was strong in FY2Q26 (September quarter), with PC revenue increasing by 17% year-on-year, and global market share reaching a historical high of 25.6%. The penetration rate of AI PCs reached 33%, while the global market share of AI PCs reached 31%, maintaining the leading position, and is expected to accelerate product structure upgrades. Thanks to its high-end strategy and supply chain management, Lenovo's Intelligent Devices Group operating profit margin has remained at a healthy level of 7.3%. Faced with soaring storage prices, Lenovo currently holds 7-8 months of storage inventory, significantly higher than its peers' 2-3 months. Strategic stocking up will protect it from the direct impact of cost increases in the next two quarters. Regarding the outlook for 2026, the management is optimistic, expecting the PC market to achieve mid single-digit growth and outperform the market. Overall, in the wave of AI PC development, Lenovo, as a global leading provider of underlying hardware, closely cooperates with upstream processor manufacturers and operating system vendors, becoming a core leader in the development of the entire AI PC wave and is expected to benefit from the major trend of AI PC application landing. DELL TECHNOLOGY: Commercial PC recovery is steady, direct sales model has relative advantages in cost pass-through Dell's Client Solutions Group (CSG) revenue increased by 3% year-on-year in F3Q26 (October quarter), with commercial PC growing by 5%, but offset by a 7% decline in consumer-level PC. Although the PC business performance is stable, the highlight of the company is the surge in AI server orders to $12.3 billion, with a backlog of orders reaching $18.4 billion, setting a historical high. Regarding cost management mechanisms, the management acknowledges that it is currently in an unprecedented storage cycle, but emphasizes that its direct sales model and supply chain scale allow it to adjust pricing more quickly than its competitors. Historically, Dell has been able to recover about 2/3 of the cost increase within 90 days. The management believes that in an environment of supply shortages, its ability to acquire components will be a key competitive advantage, expressing confidence in the profitability resilience in 2026. In terms of the outlook for 2026, Dell expects the PC market to remain steady in 2026, with the main growth driver coming from the updates resulting from the cessation of Win10 service; for FY27, the company's preliminary outlook aligns with its long-term growth framework (CSG growth of 2-3%), demonstrating a strong risk resistance confidence. HP: FY26 guidance affected by storage costs, PC profit margin guidance lowered HP's Personal System (PS) revenue in FY4Q25 increased by 8% year-on-year, with shipment volume growing by 7%, mainly driven by market share growth in commercial and high-end consumer markets. Regarding cost impacts and profit margin guidance, the company gave a cautious outlook for the 2026 fiscal year (FY26), setting the operating profit margin guidance for the Personal Systems business at the lower end of 5-7% (previously expected higher), indicating challenges in cost pass-through. In terms of cost pressure strategies, HP announced a new cost-saving plan, aiming to achieve $1 billion in total savings by the end of FY28, with $300 million expected in FY26. The company expects PC revenue growth in the 2026 fiscal year to be slightly higher than the market (low single digits), mainly relying on the improvement of AI PC combination and price increases, rather than a significant increase in sales volume. Overall, Lenovo has the strongest defense with its high inventory level; Dell shows strong resilience with its direct sales model and the second growth curve of AI servers; while HP quantifies cost impacts and lowers profit margin expectations, facing significant short-term pressure.