Xiaomi's 3nm Chip Debut and Nürburgring Glory Can't Mask a Stock Trapped Near Its Floor

Xiaomi's stock nears 52-week low as EV deliveries fall short of targets, smartphone profits slump 43%, and buybacks fail to stem the slide.

Xiaomi is sprinting on multiple technological fronts — mass-producing China's first 3-nanometer smartphone chip at TSMC and setting autonomous lap records at the Nürburgring — yet its shares are languishing at 2.72 euros, just a hair above their 52-week trough of 2.67. The equity has surrendered nearly 40% since the turn of the year, and the rout shows no sign of abating.

The company has been attempting to shore up confidence with a daily share repurchase program that kicked off on June 2. On June 17 alone it bought back four million shares at prices between 25.28 and 25.42 Hong Kong dollars, spending roughly 101 million HKD. Cumulatively, Xiaomi has retired about 30.1 million shares — a mere 0.12% of its capital — against a buyback authorization of up to 20 billion HKD. So far, the buying has failed to arrest the slide.

The deeper drag lies in Xiaomi's automotive ambitions. Its EV division delivered 32,759 vehicles in May, a 16.94% improvement year-on-year but a 10.74% drop from April. The core sedan model, the SU7, logged its eighth consecutive monthly decline. From January through May, cumulative deliveries reached 150,317 units — well short of the path needed to hit the full-year target of 550,000. To bridge the gap, Xiaomi would need to hand over roughly 57,500 cars every month from June to December, yet its monthly record stands at just 50,000.

The financial toll is brutal. The EV segment swung to an operating loss of 3.1 billion yuan in the first quarter, reversing a rare profitable quarter and amounting to a deficit of roughly $5,600 per vehicle sold. Gross margin in the automotive business shrank to 20.1%, squeezed by price reductions and rising component costs. Two new EREV models are slated for the second half of the year, but the clock is ticking.

Meanwhile, Xiaomi's core smartphone business is suffering its own pressure. Adjusted net profit collapsed by 43.1% in the first quarter, hammered by a fivefold surge in memory-chip costs. While the average selling price hit a record 1,310 renminbi per device — evidence that the premium push is working — unit shipments fell 19% year-on-year to 33.8 million. According to Omdia, that was the steepest decline among the world's five largest handset vendors.

Analysts are losing patience. Jefferies downgraded the stock to Underperform, citing shrinking margins and weak EV demand. Goldman Sachs projects a 50% profit plunge in the second quarter. The relative strength index has slid to 26.0, deep in oversold territory, but technical signals alone won't reverse the trend.

Xiaomi is betting on technological differentiation to change the narrative. This month it began series production of the Xuanjie O3 chip at TSMC, making it the first mainland Chinese company — and only the fourth globally — to build a smartphone processor on a 3nm process. The chip is designed to run at clock speeds above 4 GHz and will debut in the foldable MIX Fold 5, with plans to extend it to other smart devices. R&D spending climbed 33.4% year-on-year to 9.0 billion renminbi in the first quarter, and the company has earmarked roughly 40 billion renminbi for the full year — management has penciled in a similar figure for 2026.

On the racetrack, Xiaomi made headlines with an autonomous YU7 SUV that reportedly set a lap record at the Nürburgring without a driver, though the time has yet to be officially confirmed. Earlier, a manned YU7 GT had already broken Audi's SUV record there. Impressive as these feats are, they have done nothing to lift the stock from its floor. Whether the buyback, the 3nm chip, and the new EV models can restore investor trust ultimately hinges on execution: the MIX Fold 5 must ship this year, and Xiaomi must find a way to close its delivery gap before rival automakers widen the lead.