Xiaomi Prepares for a High-Stakes Week: Price Cuts, Rising Chip Costs, and a Giant Buyback Authorization

Xiaomi faces critical earnings test with 26% stock drop, brutal EV competition, and rising smartphone costs. Investors eye profit margins, EV scale, and potential share buyback authorization.

Xiaomi heads into a pivotal Tuesday earnings report carrying the weight of a 26% year-to-date stock decline, a brutal price war in electric vehicles, and intensifying cost pressures in its core smartphone business. The Chinese tech giant closed Friday at €3.32 in European trading, barely above its 52-week low, while the RSI indicator has drifted to an elevated 75.8 points — a technical warning that the shares may be stretched even at these depressed levels.

The most aggressive move in Xiaomi’s arsenal is the revamped pricing of its YU7 electric SUV. CEO Lei Jun has effectively torn up the previous price sheet, launching the standard YU7 at 233,500 yuan in a direct challenge to Tesla’s cheapest Model Y in China. That undercut is significant, but volume figures tell a sobering story: deliveries of the entire YU7 series plunged from nearly 38,000 units in January to barely 10,000 in April. At the top end, the 1,000-plus horsepower YU7 GT recently set a new SUV lap record at the Nürburgring Nordschleife, yet the high-performance halo has so far failed to arrest the sales slide.

On the smartphone front, Xiaomi is trying to regain momentum with the Xiaomi 17 Max, a flagship that packs an 8,000 mAh battery — a new benchmark for the premium class. The device uses the latest Snapdragon processor and a 200-megapixel Samsung camera, launching in China at 4,799 yuan. But the timing is awkward: memory chip costs are climbing sharply, and competition in the smartphone market has only intensified. The company’s previous full-year revenue of roughly 457 billion yuan, up 25%, and a surge in adjusted net profit came on a favorable comparison base that will be tough to repeat.

Tuesday’s quarterly report, due at 19:30 local time, will be parsed for two critical metrics: profit margins in the smartphone division and the pace of scaling in the nascent EV business. That unit crossed the breakeven threshold only at the end of 2025, after seeing segment revenue jump more than 123% year-on-year in the fourth quarter. Investors will also look for an update on a potential catalyst from beyond the balance sheet: portfolio company Haiguang Xinzheng, an AI-infrastructure specialist in which Xiaomi took a stake in mid-2024, is reportedly preparing an initial public offering in Hong Kong.

Just days after earnings, Xiaomi shareholders gather in Beijing on June 2 for the annual general meeting. The board is seeking authorization to buy back up to 10% of the company’s issued shares — representing as many as 2.58 billion shares — while also requesting permission for potential new equity issuance. Any sign that management believes the stock is undervalued enough to deploy that buyback could provide a floor, but the shadow of rising memory costs and a brutal EV price war means the road back to the 200-day moving average looks steep.