JPMorgan Chase has upgraded its investment rating for Lenovo Group (HK0992) from 'Neutral' to 'Overweight', accompanied by a notable hike in the target price, which has been raised from HK$20 to HK$30. The bank highlighted that Lenovo Group is set to benefit significantly from a marked improvement in the profitability of its server business, as well as higher-than-anticipated price elasticity within its Intelligent Devices Group (IDG) business. With a surge in demand from AI-centric customers, the pricing landscape for the server business has turned favorable. It is anticipated that the profit margins of the Infrastructure Solutions Group (ISG) will witness further expansion in the upcoming quarters. According to estimates, AI-related revenue constituted over 30% of ISG's total revenue in Lenovo's first fiscal quarter. For the entire year, ISG revenue is projected to grow by approximately 60% year-on-year, while operating profit margins are expected to climb from 0.4% in FY2026 to 5% in FY2027. In terms of the IDG business, JPMorgan Chase anticipates that Lenovo will sustain quarterly operating profits ranging between US$1 billion and US$1.1 billion by capitalizing on its scale advantages. The bank also forecasts that IDG revenue will experience year-on-year growth of 10% in 2026 and 4% in 2027, with operating profit margins of 6.9% and 6.8%, respectively.