Xiaomi's Two-Front Battle: EV Euphoria Meets a Memory-Chip Hangover
Published on 08/05/2026 at 22:50 | Redaktion boerse-global.de
There is a peculiar tension at the heart of Xiaomi's current market narrative. The company that built its name on affordable smartphones is now fielding a stampede of reservations for a new line of electric SUVs, while simultaneously bracing for what could be another bruising quarter in its core handset business. Both stories are unfolding at once, and investors are left to weigh which one matters more.
The immediate excitement centers on the SkyNomad SUV series, which has already pulled in more than 100,000 pre-orders within its first week of pre-sale. Trade surveys across major Chinese cities, cited in media reports, suggest the actual reservation count may be even higher. The N70 and N90 models, built on the "Kunlun" architecture, use extended-range electric vehicle (EREV) technology — a hybrid approach pairing an electric drivetrain with a range-extending combustion engine. Deliveries won't begin until September, so these numbers represent anticipation rather than booked revenue. Still, they mark a striking evolution for a company that, just a few years ago, was almost exclusively synonymous with handsets.
That transformation carries a cost, and the numbers make it plain. In the first quarter of 2026, Xiaomi generated revenue of 99.14 billion yuan with an adjusted net profit of 6.1 billion yuan — but the EV and AI innovation segment alone posted an operating loss of 3.1 billion yuan. The future business is still burning cash while the legacy operations foot the bill.
The smartphone side of the equation is where the pressure is building. Xiaomi is preparing to launch its Redmi K100 series, with the flagship K100 Pro — powered by the Snapdragon 8 Elite Gen 5 V Series — set for an official unveiling in China on August 11. Yet CICC, in a research note issued Monday, reaffirmed its rating on the stock ahead of the quarterly results while explicitly flagging concerns over declining average selling prices in the mobile business. A new flagship is meant to shore up revenue and margins, but the mass-market segment is feeling the squeeze from multiple directions at once.
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The most persistent culprit is the global memory-chip cycle. Xiaomi attributed its first-quarter profit decline — adjusted net income fell 43.1 percent to 6.1 billion yuan despite revenue growth — to margin erosion from rising DRAM prices. Whether that pressure has eased or intensified during the second quarter is the central question hanging over the August 18 earnings release, when the company presents its unaudited results. The EV delivery numbers are already well-known: July marked the fourth consecutive month with more than 30,000 vehicles shipped, though Xiaomi has acknowledged ongoing production capacity constraints. The margin trajectory in the electronics business, by contrast, remains the wild card.
Management has taken steps to signal confidence. In May, the board authorized a new share buyback program worth 20 billion Hong Kong dollars over twelve months. Founder Lei Jun also demonstrated personal conviction in November 2025, purchasing shares worth 100 million Hong Kong dollars at an average price of 38.58 Hong Kong dollars per share. The company has likewise filed routine "Next Day Disclosure Returns" with the Hong Kong exchange covering ongoing repurchases — a quiet but telling sign that the leadership is actively managing the capital structure while the share price struggles.
The stock's recent trajectory explains the defensive posture. On Wednesday, shares fell 2.28 percent to 3.06 euros, capping a seven-day slide of 14.20 percent. The longer-term picture is even starker: the stock is down 29.43 percent year-to-date and has nearly halved over the past twelve months. It currently trades 17.41 percent below its 200-day moving average and sits 53.31 percent off its 52-week high from September 2025.
Beyond the chip cycle and EV ramp, a lingering legal matter adds another layer of uncertainty. Xiaomi is contesting a customs demand from Indian tax authorities over royalty payments totaling 72 million US dollars — a figure that could grow to as much as 150 million US dollars with interest. The case remains unresolved, and an adverse ruling would not only hit the balance sheet but could also dent confidence in the company's international expansion strategy.
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In the background, the operational machinery keeps turning. Early August brought the regular rollout of Android security patches for HyperOS and ChinaOS, starting with the Xiaomi 15S Pro and the Pad 7 series — a routine reminder that the day-to-day business continues regardless of the larger narratives swirling around the stock.
The August 18 earnings report will provide the first hard evidence of whether the DRAM cycle has peaked or still has room to bite. If margins in the electronics segment stabilize while EV momentum holds, the buyback program could help underpin the share price. If the memory-chip squeeze persists, the stock may face another leg down. For now, the market is left weighing a record-breaking product reception against a profit engine that is running hot in all the wrong places.
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