Xiaomi’s AI and OS Push Can’t Mask Looming Profit Halving, Goldman Warns
12.06.2026 - 19:04:55 | boerse-global.de
Goldman Sachs has thrown a bucket of cold water on Xiaomi’s ambitious technology roadmap, forecasting a 50% plunge in adjusted second-quarter net profit to 5.4 billion yuan. The warning comes just as the Chinese tech group rolls out a flurry of software and AI initiatives, from a new operating system to a multi-billion-dollar computing bet — and as its shares languish near a 52-week low.
The stock, which ended the week at €2.88 in European trading, has already lost nearly 36% since the start of 2026 and more than 50% over the past twelve months. It briefly touched a new 52-week nadir of €2.82 on Thursday. The relative strength index sits at 30.6, hovering just above oversold territory. Goldman’s caution suggests that even with Xiaomi’s long-term strategy intact, the near-term earnings picture could test that support level.
Billion-Dollar AI Ambitions
None of Xiaomi’s current slump stems from a lack of ambition. The company this week unveiled MiMo Code, an open-source AI programming assistant powered by its own MiMo-V2.5 model. It is part of a wider plan to funnel roughly $8.7 billion into artificial intelligence by 2029, building large-scale computing models designed to link smartphones, wearables, and electric vehicles into a seamless ecosystem.
That ecosystem will get a fresh backbone in August when HyperOS 4 replaces MIUI after 16 years. Built on Flutter and Rust, the new interface promises leaner, more secure code. Key AI tools — image editing, transcription — will run entirely on-device, cutting out the cloud. To underline the hardware-software convergence, Xiaomi demonstrated a robotic charging arm that plugs into its EV autonomously.
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Q1 Pain, Q2 Worse
The operational numbers, however, tell a more painful story. In the first quarter of 2026, revenue rose to 99.1 billion renminbi and adjusted net profit reached 6.1 billion renminbi, but that was powered by a record average selling price of 1,310 renminbi for smartphones — a direct consequence of shipments collapsing 19.2% year-on-year.
Goldman’s second-quarter preview is even darker. The bank forecasts revenue growth of just 1% overall, and a 9% decline when electric vehicles and AI are stripped out. The expected 50% earnings collapse would leave adjusted net profit at 5.4 billion yuan, a stark reversal from the first quarter. Even so, Goldman maintains a “Buy” rating, signalling faith in the long game.
R&D, Tokens, and an Espresso Machine
Xiaomi is spending more than 16 billion yuan on R&D in 2026. In its AI-model token distribution, 80 out of a planned 100 trillion tokens have already been allocated. Meanwhile, on June 17, the company launches crowdfunding for new lifestyle products in China, including its first portable Mijia espresso machine — a reminder of how widely it casts its bets.
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Yet none of that will matter much when Xiaomi reports second-quarter earnings on August 26. If the Goldman scenario plays out, investors will be watching whether software and services can start generating meaningful revenue fast enough to offset the hardware slowdown — and whether the €2.82 floor holds.
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