Xiaomi Braces for Q1 Earnings as Soaring Memory Costs Threaten Margins While EV Output Hits Record

Xiaomi shares shed 25% in 2025, approaching €3.17 support ahead of May 26 earnings. Memory price hikes from HBM demand and rising smartphone costs weigh, while EV deliveries hit record 30,000 monthly.

Xiaomi’s stock has shed roughly a quarter of its value since the start of the year, closing Friday at €3.37 — a level that now sits deep below its 200-day moving average and within striking distance of the yearly trough at €3.17. The sell-off sets a tense stage for the company’s first-quarter earnings release on 26 May, where investors will weigh operational milestones against mounting cost pressures in the smartphone division.

The most immediate headwind comes from the component side. Xiaomi president Lu Weibing warned in a recent livestream that top-tier smartphones could soon breach the 10,000 yuan mark in China — around $1,400 — driven by a near-quadrupling of DRAM and NAND flash prices year-on-year. For the most common memory configurations alone, production costs have swelled by 1,500 yuan per device. The impact has already rippled through the company’s lineup: Xiaomi raised prices on the Redmi K90 Pro Max, while rivals OPPO and Vivo followed suit. Even the pricing of the upcoming Xiaomi 17 Max remains under internal debate.

Behind this price shock lies a structural shift in the supply chain. Memory giants such as Samsung, SK Hynix and Micron are prioritising high-bandwidth memory (HBM) for AI accelerators, where margins are far juicier than in the commodity smartphone segment. That pivot has broken the usual market feedback loop. IDC now forecasts global smartphone shipments to contract by nearly 13% in 2026, yet any slack in demand is being absorbed by data centres hungry for HBM, keeping component prices elevated.

Against this backdrop, the electric vehicle business provides a counter-narrative. In April, Xiaomi handed over more than 30,000 EVs in a single month for the first time — a record that signals the ramp-up is gaining traction. The momentum comes ahead of the earnings report, where consensus estimates call for roughly 101 billion yuan in revenue and earnings per share of 0.18 yuan.

The company is also working to shore up its smartphone ecosystem in the face of hardware headwinds. Mid-May brought surprise software updates for older models, including the Xiaomi 12, well after their standard support cycle ended. The move appears designed to retain users within Xiaomi’s platform even as premium device prices climb.

Longer-term, Xiaomi aims to reduce its reliance on external suppliers with its own chipset. The in-house XRING O3 processor is expected to launch later this year, fabbed on TSMC’s 3-nanometre node. With eight cores clocking up to 4.05 GHz, the chip could eventually find its way into the company’s electric vehicles — a shift that would broaden its ecosystem but likely delay automotive certification.

Analyst sentiment remains broadly positive — 24 out of 26 surveyed experts rate the stock a buy. Yet the chart tells a different story. The shares are approaching a critical support line at €3.17, and with the 26 May earnings release as the next catalyst, any miss on the top-line could send the stock straight into that danger zone. The market is signalling that even a record EV delivery number may not be enough to offset the margin squeeze from a memory market that shows no signs of easing.