Alibaba's trillion-dollar AI investment benefits computing concepts, Lenovo is expected to secure more server orders

On September 1st, the stock price movement of Alibaba (09988.HK) became the focus of the Hong Kong stock market, surging over 19% during the session to reach HKD 138 per share, with the Alibaba concept sector also climbing, at one point increasing by over 2%. This significant rise in stock price reflects the market's high attention and positive expectations regarding Alibaba's layout in the AI field.

In February this year, Alibaba announced a major plan to invest over 380 billion yuan in building cloud and AI hardware infrastructure over the next three years. During the earnings call on August 29th, Alibaba CEO Eddie Wu further stated that although AI development expenditures may fluctuate each quarter due to supply chain volatility, Alibaba has a "backup plan" based on global AI chip supply and policy changes. By collaborating with different partners, Alibaba is building a diversified supply chain reserve to ensure that the 380 billion yuan capital expenditure progresses as expected. This firm investment undoubtedly serves as a strong endorsement of its AI strategy.

From Alibaba's latest second-quarter financial report, the effectiveness of its investments in the AI field is significant. Alibaba Cloud's revenue grew by 26%, reaching a three-year high, while AI-related revenue has achieved triple-digit growth for eight consecutive quarters, accounting for over 20% of external commercialization revenue. Currently, Alibaba has established a virtuous cycle of AI investment and revenue growth. In terms of chip layout, Alibaba's Tmall Genie has launched chips such as Lingguang 800, Yitian 710, and Zhenyue 510, while the DAMO Academy's XuanTie is betting on the RISC-V architecture, actively promoting the localization process of the AI computing power market. Recently, there have been rumors that Alibaba is developing new AI chips aimed at filling the gap left by NVIDIA in the Chinese market, and that these chips have entered the testing phase. If the news is true, it will further enhance Alibaba's AI chip landscape.

Such a large-scale expansion of AI and cloud computing business has led to an explosive growth in demand for hardware devices such as servers. Lenovo Group (00992.HK), as an important player in the global server market, has a close partnership with Alibaba.

The cooperation between Lenovo and Alibaba has a long history and continues to deepen. As early as 2017, Lenovo began collaborating with Alibaba Cloud and has been an important server supplier for Alibaba Cloud. In April of this year, Lenovo Group Chairman and CEO Yang Yuanqing revealed that Lenovo servers have won the favor of major clients such as Alibaba and ByteDance.

From the perspective of hardware supply, Lenovo can provide Alibaba with customized, high-performance server products to meet Alibaba's diverse needs in complex business scenarios such as cloud computing, big data processing, and AI model training. In addition, Lenovo has extensive and broad cooperation with Alibaba in AI PCs and intelligent solutions aimed at industries and enterprises.

In Lenovo Group's first-quarter financial report for the fiscal year 2026, its operating revenue reached 136.2 billion yuan, with net profit under non-Hong Kong financial reporting standards increasing by 22% year-on-year to 2.816 billion yuan, demonstrating a robust financial condition. In terms of server business, Lenovo's performance is also impressive. Its AI infrastructure business has maintained explosive growth, with Q1 revenue increasing by 155% year-on-year, and order reserves showing strong performance, while liquid cooling technology solutions achieved nearly 30% revenue growth In the Chinese market, ISG has maintained ultra-high-speed growth and improved profitability, with revenue increasing by 76% year-on-year and operating profit margin rising by 3 percentage points year-on-year.

According to IDC's Q1 2025 x86 server market data, Lenovo's servers have entered the top three globally, with revenue soaring by 74.8% to reach USD 4.12 billion, leading the growth among the top five manufacturers and achieving a dual harvest of market share and revenue.

Looking ahead, as Alibaba continues to deepen its efforts in the AI field, its demand for servers is expected to maintain a stable and strong growth trend. Lenovo Group, leveraging its comprehensive strengths in server R&D, production, delivery, and technical services, along with its solid cooperative foundation with Alibaba, is likely to secure more orders in Alibaba's server procurement, further consolidating its leading position in the server market and achieving sustained growth in revenue and profit. The deep cooperation between the two parties is also expected to inject new vitality into the development of the entire AI industry ecosystem, bringing more innovative results and transformations