Xiaomi's Two-Front Gamble: A 100,000-Unit SUV Bet Against a Deepening Cost Squeeze
Published on 08/07/2026 at 18:11 | Redaktion boerse-global.de
The arithmetic at Xiaomi is getting harder to reconcile. Roughly 100,000 pre-orders have piled up for two new electric SUVs, the SkyNomad N70 and N90, while the share price sits at 3.03 euros after shedding nearly a third of its value over the past year. That gap between commercial momentum and market sentiment is now the central tension for anyone holding the stock.
A Market That Can't Decide
The numbers tell a story of a company pulling in two directions at once. The automotive division generated 19.9 billion yuan in revenue during the first quarter of 2026 — a clear sign the EV push is gaining traction. Yet the tablet segment saw sales slip 6.8 percent in the second quarter, and rising prices for memory chips like DRAM and NAND are squeezing margins across nearly every product line, from smartphones to tablets.
That ambiguity has split the analyst community down the middle. UBS published a research update on Monday suggesting the upcoming quarterly results could deliver a positive surprise despite the chip-cost pressure. JP Morgan, publishing the same day, questioned whether Xiaomi can hit its ambitious EV delivery targets for the year. One house is betting on near-term earnings quality; the other is skeptical of the structural growth story. The market, for now, is refusing to pick a side — and that indecision is fueling the stock's nervous trading.
The Real Test Isn't the EV Hype
The electric vehicle narrative dominates the headlines, but the more consequential question sits in the core hardware business. Xiaomi cannot indefinitely run a margin-thin consumer electronics operation while pouring capital into a manufacturing-heavy automotive venture. The 16 billion yuan earmarked for artificial intelligence investments in 2026 adds another layer of capital demand, money that might otherwise fund production expansion.
Should investors sell immediately? Or is it worth buying Xiaomi?
The recent price action reflects this uncertainty. On Thursday, the stock fell 2.41 percent to close at 2.98 euros, a decline that some traders interpreted as the market pre-pricing disappointment ahead of the earnings release. The year-to-date loss stands at 31.29 percent, a figure that underscores how deeply the skepticism has become entrenched. This is not a knee-jerk reaction to a single earnings miss — it's a months-long reassessment of the company's trajectory.
What September Will Settle
The near-term direction hinges on the September delivery figures for the SkyNomad models. If Xiaomi works through those 100,000 pre-orders quickly, the automotive revenue base could broaden substantially. The N90 Max, with a combined range of up to 1,705 kilometers, positions the company in a higher-margin slice of China's EV market. The expansion of the Mijia home appliances brand into India, where it aims to take share from Samsung and LG, adds another potential growth vector.
The chart offers some encouragement. The stock is trading above its 50-day moving average of 2.91 euros, and holding that level could open a path toward the 3.20-euro mark. The 52-week low of 2.34 euros, however, marks the danger zone if delivery delays or supply chain snags materialize.
On the cost side, the trajectory of DRAM and NAND prices over the coming weeks will be a telling indicator of how severe the margin pressure actually becomes. If memory chip inflation escalates, the hardware business could absorb a heavier blow than current estimates suggest.
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The company, meanwhile, continues to operate with business-as-usual discipline. The August Android security patch began rolling out Tuesday for the Pad 7 Ultra and Pad 7S Pro 12.5 tablets in China — a minor detail in the broader investment thesis, but a reminder that behind the stock price debate sits a conglomerate still managing its day-to-day operations across a wide product portfolio.
For investors, the calculus is straightforward but uncomfortable. The bull case rests on SUV demand translating into delivered units and revenue. The bear case rests on margin erosion and capital constraints compounding. Until the quarterly numbers and September delivery data provide hard evidence, the stock remains a bet on which narrative breaks first.
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