Chip Costs and EV Hopes: Xiaomi Stock Stuck Between Two Forces

Xiaomi's EV division hits record deliveries of 30,000 units for a second month, yet stock nears 52-week low as smartphone component costs surge and demand slumps.

Xiaomi finds itself in a precarious spot. Its electric-vehicle division is churning out record deliveries, yet the stock sits just a hair above a 52-week trough. The disconnect stems from a brutal squeeze in the smartphone core business, where component prices are soaring and demand forecasts are being slashed.

Smartphone Market Rout Leaves Xiaomi Exposed

The global smartphone market is heading for a sharp contraction in 2026. Counterpoint Research projects shipments will fall 13.9 percent year-on-year to 1.08 billion units. Xiaomi is expected to take the hardest hit among major players, with a forecast 28 percent decline in unit sales. By contrast, Samsung’s volumes are seen dropping only about 4 percent, while Apple’s numbers are expected to remain largely flat.

The culprit is an acute shortage of memory chips. Geopolitical tensions have tightened supply, and wholesale prices for key components jumped 14 percent in the first quarter alone. For Xiaomi, the pain is magnified because it relies heavily on mid-range devices that leave little margin for cost pass-through. DRAM and NAND flash prices have nearly doubled from a year ago, eroding gross margins in its hardware business.

EV Deliveries Cross 30,000 for Second Straight Month

While the smartphone side struggles, Xiaomi’s electric-vehicle operation is gaining traction. In May the company delivered more than 30,000 units for the second consecutive month, bringing the cumulative total for the first five months of 2026 to over 140,000 vehicles. The annual target stands at 550,000 — an ambitious figure that would require a significant ramp-up in the second half.

The growth is being driven by the YU7 series and the newly refreshed SU7 generation. However, the EV division is still bleeding cash. Heavy investment in new production capacity, including a plant in Wuhan, is weighing on operational margins. Analysts are watching profitability closely: the unit needs to show it can scale without sacrificing returns.

New Handset Launch and AirDrop Bridge

To defend its turf in smartphones, Xiaomi is accelerating its product cycle. The 17T series goes on sale in India this Thursday, targeting the upper mid-range segment with a 6.59-inch AMOLED display and a triple-camera setup featuring a periscope telephoto lens. The timing is deliberate — rivals Oppo and Vivo are pushing aggressively into the same price bracket. Leaks about the upcoming Xiaomi 18 series suggest an even faster replacement cadence.

On the software side, Xiaomi is closing the ecosystem gap with Apple. Starting June 1, its “Quick Share” function will support file transfers with iPhones via the AirDrop protocol, initially on the Xiaomi 17T Pro running HyperOS 3. The feature could help retain customers in the long run, but it does little to address the immediate margin pressure from rising chip costs.

Stock Near the Floor, Technical Signals Mixed

Xiaomi’s stock is trading at €3.13, down 3.37 percent on the day, bringing the year-to-date loss to over 30 percent. The 52-week low of €3.04, touched in late May, is barely a stone’s throw away. Technical readings are sending conflicting signals: one RSI measure stands at 40.8, not yet in oversold territory, while another shorter-term reading sits at 76.8, suggesting a brief overbought condition. Neither points to a clear trigger for a rebound.

Profitability Is the Missing Link

Xiaomi’s European vehicle rollout is not due until 2027, so near-term investor sentiment hinges on two factors: the trajectory of memory-chip costs and the EV unit’s margin improvement. The next quarterly report will provide the first hard evidence of whether the company can contain hardware losses while scaling its automotive ambitions. Until then, the stock is caught between a promising EV narrative and a punishing smartphone downturn.