Xiaomi’s Buyback Blitz Can’t Outrun Memory-Chip Squeeze and Fed Headwinds
13.06.2026 - 05:27:20 | boerse-global.de
Xiaomi has been snapping up its own shares at a breakneck pace, executing the 70th buyback transaction of the year just yesterday with 7.8 million shares added to the treasury. A fresh 20 billion Hong Kong dollar repurchase programme got underway in early June, yet the stock continues to drift near its worst levels in 12 months. At €2.90, it sits barely above the 52-week trough of €2.82 touched on Thursday, while the year?to?date loss has widened to 35.45%.
The market’s indifference to the buyback reflects deeper structural pressures. In the smartphone segment — where Xiaomi has long dominated the mid? and low?tier brackets — margins are being crushed by surging memory?chip prices. Analysts expect conventional DRAM contract rates to leap by as much as 63% in the second quarter, with NAND flash rising 75%. Xiaomi’s smartphone shipments in China already collapsed 35% in the first quarter to 8.7 million units, the sharpest decline among the global top?five handset makers. Group revenue for the period slid 11% to 99.14 billion yuan, while adjusted net income plummeted 43%.
The electric?vehicle division is compounding the pain. In the first quarter, the auto business posted an operating loss of 3.1 billion yuan — roughly $5,600 per vehicle delivered. Management remains undeterred, pressing ahead with plans for an extended?range electric platform and a large family SUV under a new sub?brand. Yet the broader market for such vehicles is contracting: China’s wholesale sales of extended?range EVs fell nearly 25% in May.
Should investors sell immediately? Or is it worth buying Xiaomi?
Macroeconomic headwinds are adding to the pressure. The Federal Reserve’s Open Market Committee will meet on 16–17 June, and with Kevin Warsh now at the helm, no rate cut is expected. For growth?oriented names like Xiaomi, elevated interest rates weigh heavily on valuations. Chinese technology stocks are already battling weak consumer sentiment and falling real wages in key markets.
A potential wildcard comes from the semiconductor side. Nvidia launched a product offensive in China on Friday, opening orders for its new Vera CPU, with deliveries slated for August 2026. Early customers include Alibaba Cloud and ByteDance. As Xiaomi pours investment into artificial intelligence and the Internet of Things — both heavily reliant on advanced chips — the impact of evolving export conditions on China’s AI ecosystem will be closely watched.
Technically, the stock looks oversold. The relative strength index hovers around 32.5, with readings of 32.4 to 32.6 reported, deep in oversold territory. That can spark short?term bounces, but no trend reversal is in sight. The 50?day moving average sits at €3.32, nearly 13% above the current price, while the 200?day average at €4.23 represents a 31% gap. The downtrend remains intact.
For now, Xiaomi’s multi?billion?dollar share?buyback campaign is failing to convince investors that the worst is over. Until the core smartphone business stabilises and the EV unit shows a credible path to profitability, the stock’s support levels will continue to be tested — with the Fed and chip costs writing the next chapters.
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