Morgan Stanley anticipates that Lenovo Group's first-quarter results, set to be unveiled next week, will demonstrate remarkable performance. Revenue is projected to hit US$24 billion, marking a substantial 27% year-on-year surge and an 11% quarter-on-quarter increase. The adjusted net profit is estimated to be around US$788 million, skyrocketing by 102% year-on-year and 41% quarter-on-quarter, outstripping market expectations by approximately 12%. The bank highlighted that the robust orders for AI and general-purpose servers indicate that the market might be undervaluing the order backlog and profitability of Lenovo's ISG division. In the meantime, the escalating demand for AI has spurred structural enhancements in the supply-demand dynamics of memory. This has enabled Lenovo to transfer costs and safeguard its profit margins. It is predicted that the profit margin of the IDG business will stay within the range of 7% to 7.5%. Moreover, Morgan Stanley's adjusted net profit forecasts for Lenovo for the fiscal years 2027 to 2029 are 14%, 20%, and 25% higher than the market consensus, respectively. Consequently, the bank has elevated Lenovo's target share price from HK$30 to HK$34 and kept the 'Overweight' rating.