Xiaomi's Portfolio Paradox: A Chip Stake That Profits From the Very Squeeze Hurting Its Phones
Published on 08/23/2026 at 17:41 | Redaktion boerse-global.de
There is a certain irony embedded in Xiaomi's latest share-price recovery. The same memory-chip price surge that crushed margins across its smartphone division has just delivered a windfall — at least on paper — through a minority stake in a company that lives and breathes those very prices. CXMT, the Chinese memory-chip maker in which Xiaomi holds a position, closed its late-July market debut a staggering 466 percent above its issue price, a jump that swells the book value of Xiaomi's holding even if no cash actually changes hands.
The timing could hardly be more pointed. Days earlier, Xiaomi had declared the worst of its smartphone troubles over, forecasting that memory-chip price increases would moderate in the second half of the year. Those same prices, the ones that have been gnawing at handset margins, are the lifeblood of CXMT's business. The result is a neat counterpoint: a company Xiaomi partly owns is profiting from the exact dynamic that has been squeezing its parent.
Buybacks and a Broader Support Structure
The CXMT gain is hardly the only force underpinning the stock. Xiaomi has been leaning heavily on its own balance sheet as well. Under a mandate approved in June, the company repurchased roughly 79.8 million of its own shares by mid-July — about 0.31 percent of its share capital. That follows a broader 2026 buyback campaign that has already seen Xiaomi spend around 11.7 billion Hong Kong dollars on its own equity, surpassing the full-year total from the prior year.
Management has also moved to lock in key talent. On Wednesday, the board approved the allocation of 41.8 million shares to 1,652 employees under the "2023 Share Scheme," priced at a reference rate of 27.44 Hong Kong dollars per share — a retention play that signals confidence in the road ahead even as the company pours resources into its automotive push.
Should investors sell immediately? Or is it worth buying Xiaomi?
The market has taken notice. The stock closed Friday at €3.16, up 3.9 percent on the day and 11 percent over the past seven trading sessions. Yet the longer-term picture remains sobering: the shares are still down 27 percent year-to-date and sit 52 percent below their 52-week high of €6.54, reached last September. With 30-day annualized volatility running at 61 percent, this remains a stock that moves hard in both directions.
The Smartphone Squeeze Isn't Over
For all the positive noise, the core handset business is still licking its wounds. Second-quarter smartphone revenue fell 7.5 percent year over year, with shipments plunging 26.5 percent to 31.2 million units. The one bright spot: average selling prices hit a record, underscoring a deliberate pivot toward premium models — a strategy that sacrifices volume in the short term to defend margins.
EVs Carry the Growth Mantle
The electric-vehicle division, by contrast, keeps delivering. Xiaomi handed over 104,199 vehicles in the second quarter, up 28.2 percent year over year, and has raised its full-year delivery target to 550,000 units. The cumulative tally for its SU7 sedan crossed the half-million mark on Monday, roughly 28.5 months after launch, with July alone contributing 31,267 deliveries.
That annual goal, however, demands a significant acceleration: the company needs to average around 67,000 deliveries per month for the rest of the year — a substantial jump from July's pace. Guosen Securities nonetheless sees the EV unit's gross margin hitting 20 percent for full-year 2026, building on the 19.2 percent already reported, thanks to an improving product mix and economies of scale.
A September Pivot
The coming weeks carry weight. September brings the official launch of the "Pengcheng" series and the "SkyNomad" extended-range electric SUV (EREV), both aimed at broadening a lineup that has leaned heavily on the SU7 sedan. Xiaomi will also take its "Human x Car x Home" ecosystem to the IFA trade fair in Berlin, marking the start of a European push into large home appliances.
Taken together, the picture is of a company executing a careful balancing act: diversifying beyond phones into vehicles and a broader ecosystem, while a stake in a memory-chip maker quietly benefits from the very pricing pressures that continue to test its core business. The recovery in the share price reflects that complexity — but so does the volatility that still surrounds it.
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