Smartphone Strength and Share Buybacks Prove No Match for Xiaomi’s EV Bleeding and Chip Squeeze

Xiaomi launches premium 17T phones with Leica and 7,000 mAh battery, but stock slides 11% below 50-day moving average as EV losses and AI spending weigh.

Xiaomi is pulling every lever it has. The company launched its premium 17T Series with Leica optics and a massive 7,000 mAh battery in Hong Kong and Europe today, while continuing a record buyback programme that has already soaked up HK$8.4 billion of shares since January. Yet the stock plumbed a new 52-week low of €3.06 on Friday, falling nearly 3% and now trading more than 11% below its 50-day moving average. The gap between operational momentum and market sentiment has rarely been wider.

The smartphone division, still the group’s backbone, delivered a solid first quarter. Worldwide shipments hit 33.8 million units, marking the 23rd consecutive quarter in the global top three. Revenue from Smartphone × AIoT reached 79.3 billion yuan, with handsets alone contributing 44.3 billion yuan. Global market share stood at 11.3%, and in Europe it climbed to 17.2%. The new 17T and 17T Pro, priced from HK$3,999 in Asia and €749 in Europe, aim to push further into the premium tier with MediaTek Dimensity chipsets, a 1.5K AMOLED display, and a Leica-tuned triple camera. The Pro model’s silicon-carbon battery — a rarity even in the high-end segment — underscores Xiaomi’s ambition to differentiate on hardware.

But that hardware push comes at a cost. Memory chip prices have been squeezing smartphone margins, and the company’s response is to spend heavily on software and services. Chief executive Lei Jun has committed roughly €7.5 billion over three years to artificial intelligence, focusing on the HyperOS platform and AI features for its connected ecosystem. The logic is sound — reducing dependence on volatile component costs — but the market sees near-term earnings pressure from the upfront investment.

The drag from the electric vehicle business is even more pronounced. Xiaomi delivered nearly 81,000 vehicles in the first quarter, bringing cumulative YU7 SUV deliveries past 232,000 units by the end of April. Management is sticking to a full-year target of 550,000 vehicles, and CFO Lin Shiwei has promised additional new models in the second half. Yet the EV segment posted an operating loss of 3.1 billion yuan. High upfront costs, sluggish smartphone demand, and fierce competition in the EV market are combining to create what analysts describe as a “triple-cycle” headwind.

The stock’s slide has been relentless since last June, with the share price roughly halving from its peak. Buybacks have failed to stem the decline. On Thursday alone, Xiaomi repurchased 10.5 million B-shares for about HK$298 million, but the following day’s session erased those efforts. Technically, the next support level sits around HK$28.40; a sustained break below that zone would accelerate the downward trend.

R&D spending continues to ramp up — 9.0 billion yuan in the first quarter alone, with 26,048 employees working in research. The 17T launch event on 28 May in Vienna was styled as a “New Evolution” for the T-series, and the company also unveiled new wearables, smart-home devices and TVs to showcase the breadth of its ecosystem. The question for investors is whether that ecosystem can generate enough revenue and margin improvement to offset the twin pressures of chip costs and EV losses. For now, the market is voting with its feet.