Lenovo Group heads into the post-earnings week at all-time highs, with shorts caught badly offside and the Street scrambling to reprice the AI infrastructure story.
The catalyst was the May 22 full-year results release, which sent the stock up 38% in a single session. Shares have now gained 43% over the week and more than 51% over the past month, closing at HK$18.19. The driver is unmistakable: AI-optimised server demand. Lenovo's infrastructure and solutions segment delivered results that forced analysts to sharply revise earnings forecasts — and caught a meaningful number of short sellers in the wrong direction at exactly the wrong moment.
The positioning picture is striking precisely because short interest was already elevated heading into the print. Short interest stood at 10.2% of free float — a genuinely high level for a hardware company of this size — and had been largely stable over the prior month at around 1.27 billion shares short. Days to cover ran at nearly 14 according to the latest official filing. That is a lot of fuel. As the stock ripped higher on earnings, those positions faced accelerating mark-to-market losses, and the borrow market reflected the shift: availability loosened sharply in the days after the print, jumping from around 199% on May 15 — when shorts were most extended — to 282% by May 26, as some short sellers closed out. Cost to borrow, at roughly 0.92%, remains low in absolute terms and barely moved through the event, suggesting the unwind was orderly rather than panicked. Short interest itself has only edged down 0.1% on the day and is still elevated at 10.2% of float. Not all bears have folded.
The Street moved decisively bullish in the wake of results. Goldman Sachs raised its target to HK$27, maintaining Buy — a target still well above the current HK$18.19 close. Citi reiterated Buy and lifted its target to HK$20. UOB Kay Hian upgraded to Buy and set a target of HK$20.20. The sole dissenting voice was Morgan Stanley, which held at Equalweight and flagged cost inflation as a concern — a reminder that tariff and supply-chain pressures have not vanished. The consensus across 12 buy ratings and 6 holds leans bullish, but the mean target of HK$27 deserves a caveat: that figure likely incorporates some stale estimates not yet refreshed post-results, and the current price has already covered much of the prior consensus gap in a matter of days. The P/E has re-rated materially, rising roughly 2.3 points over the past 30 days to 12.5x. EV/EBITDA is at 6.2x — not stretched for a company now demonstrably growing its AI infrastructure business.
The ownership structure adds another layer to the story. Legend Holdings holds 23% of shares, Lenovo's founding parent. CEO Yang Yuanqing holds a further 6.2%. JPMorgan, a declared 5% owner, was actively trading around the stock through late March and into April — buying 24.7 million shares on April 21 at HK$11.01, a position that will have accrued a substantial gain inside six weeks. BlackRock marginally added shares in the same period. Among correlated peers on the Hong Kong exchange, 3396 — which gained 11% on the day and 29% on the week — suggests the AI hardware re-rating is lifting the sector broadly, not just Lenovo specifically.
The ORTEX short score remains elevated at 72.2, still in the top percentile for short positioning despite the rally, and short interest has not meaningfully unwound. The gap between the current price and remaining bear positioning is the central tension worth tracking: whether the 10%-plus short float continues to compress as the new earnings narrative takes hold, or whether Morgan Stanley's cost-inflation caution and a stock now up 51% in a month create enough uncertainty to sustain a residual short base.
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