In the latest financial reports released by Lenovo, the company’s data center group recorded a record 67.8% revenue growth over Q1 2017. Total revenues for the data center group were $1.6 billion USD, driven by growth in Software Defined Infrastructure, High Performance Computing, artificial intelligence and hyperscale.

Yang Yuanqing, Chairman and CEO of Lenovo, said that with the latest results, Lenovo has passed a turning point and has begun a phase of rising momentum in the company’s transformation strategy and in business performance.

“In the future,” he said, “we will maintain industry-leading profitability and premium to market growth in PCs; return the smartphone business to health; build the data center business into a sustainable growth and profit engine, and continue to invest in ‘Smart IoT + Cloud’ and ‘Infrastructure + Cloud’ to drive long-term sustainable return.”

In the data center, the company’s software-defined products including ThinkAgile, experienced triple-digit growth. Lenovo also found a strong demand for flash-based storage solutions, with 42% year-over-year group; and this quarter, for the first time, Lenovo surpassed HPE to become the top provider of supercomputers on the TOP500 supercomputer list.

Just last month, Lenovo partnered with Cloudistics to offer a hybrid cloud solution that can be secured behind the customer’s data center firewall. The offering is a turnkey cloud-in-a-box that can be centrally managed through an SaaS portal.

The company also intends to take advantage of the growing popularity of eSports, partnering with Dorna to sponsor the MotoGP eSports Championship to be held in Spain this fall.

Lenovo intends to use the Capital and Incubator Group to continue growth in next-generation applications of AI, IoT, Big Data, and VR/AR, expanding through various industries including manufacturing, healthcare and transportation.

However, skeptics are still concerned with Lenovo’s strategic focus on PC sales, noting that HP, Dell and Huawei present strong competition in this area. Additionally, although the company has changed its mobile and smartphone strategy to focus on the North and South American markets, it still lags in fourth place of market share behind Apple, Samsung, and LG.