Xiaomi Faces a Pivotal Week: EV Surge, Earnings Test, and a Potential $100 Billion IPO Subplot

Xiaomi reports Q1 results Tuesday amid sharp stock decline; EV revenue surged 224% in 2025, but smartphone margins, chip costs, and IPO rumors for software unit add uncertainty.

Xiaomi’s electric-vehicle division has emerged as an unlikely bright spot in a year that has otherwise punished the stock. The Smart EV, AI and new initiatives segment contributed 106 billion renminbi to group revenue in 2025, a 224% surge that will be front of mind when the company reports first-quarter results on Tuesday. That same day, the market reopens in Hong Kong after a public holiday, and the shortened trading week leaves little room for error.

The stock is already under pressure. In Frankfurt, Xiaomi closed at €3.32 on Friday, down 26% since the start of 2026 and 45% below its level a year ago. The 52-week low of €3.17 is just over 4% away, while the Hong Kong-listed shares ended the pre-holiday session at HK$30.00 – barely above the HK$28.80 trough. The relative strength index sits at nearly 76, signalling short-term overbought conditions, but the chart remains fragile.

Three Pressure Points in the Quarterly Report

Analysts will scrutinise Tuesday’s earnings on multiple fronts. Smartphone margins are the first test: Xiaomi warned in the fourth quarter of 2025 about rising memory-chip costs and intensifying competition. Whether those headwinds have eased will be a key determinant of sentiment. The company’s own chip development programme offers a longer-term answer – the homegrown XRING 01 has already shipped one million units, and a 3-nanometre XRING 03 is slated for 2026 – but for now hardware margins remain squeezed.

Second is the EV business, where the upcoming Shenzhen Auto Show on Friday provides a stage to showcase the full YU7 family alongside more than 100 other brands. The timing is deliberate: the show falls just after the earnings release, keeping Xiaomi in the spotlight for consecutive days. Third are the investment plans. Xiaomi has pledged to spend more than 200 billion renminbi on research and development between 2026 and 2030, up from 105.5 billion yuan over the previous five years. Concrete milestones for the current year would reassure investors that the cash is being deployed effectively.

IPO Rumours Add a Wild Card

The earnings narrative is being complicated by chatter about a blockbuster listing. According to market observers, Xiaomi has filed an application for an initial public offering of its software unit in Hong Kong – potentially the largest debut by a Chinese software firm in nearly four years. The valuation is being bandied about at up to $100 billion. The company has not confirmed the move, but the logic is clear: Xiaomi needs capital to fund its push into artificial intelligence and software, and a separate listed entity could unlock significant value.

For now, the IPO remains speculation. Yet the mere possibility has injected a dose of hope into a stock that has been grinding lower. The new Xiaomi 17 Max smartphone, equipped with a 200-megapixel Leica camera and going on sale in China on May 25, is another near-term lever intended to support margins in the core handset business.

The Week Ahead

Tuesday’s earnings call at 7:30 p.m. Beijing time will be the main event, but the week offers additional catalysts. Chinese industrial profits data due on Wednesday could sway the broader tech sector, and the Shenzhen Auto Show on Friday gives Xiaomi a chance to press its EV credentials. With only four trading sessions in Hong Kong, the market’s reactions will be concentrated and potentially volatile.

Chart watchers see the €3.30 zone in Frankfurt and the HK$28.80 level in Hong Kong as critical support. A positive surprise on margins or an update on the IPO process could provide the spark for a breakout from the sideways drift. If the numbers disappoint, the 52-week lows will be tested again. Either way, this week will tell whether Xiaomi’s story can regain its momentum.