Xiaomi’s Accelerated Phone Launch and Buyback Signal Urgency as Chip Costs and a 26% Stock Rout Test Q1 Earnings

Xiaomi shares tumble 25% as memory-chip costs surge; all eyes on Tuesday's Q1 earnings, early flagship launch, and potential 10% share buyback.

The stock has lost more than a quarter of its value since the start of the year, and the pressure is not letting up. Xiaomi’s shares trade at €3.32, perilously close to the year’s low and more than 25% below the 200-day moving average. The relative strength index has climbed to 75.8, suggesting the selling has been relentless. All eyes are now on the first?quarter earnings release due Tuesday, when management must convince investors that operational strength can overcome a punishing market environment.

At the heart of the tension is a sharp rise in memory?chip prices. CEO Lei Jun has warned that the trend will persist for at least two more years, and the numbers are stark: Counterpoint Research reports that memory prices surged by as much as 90% in the first quarter alone. Gartner forecasts that consumer electronics will carry the cost increases through 2026, while IDC expects global smartphone sales to drop nearly 13%. Xiaomi, which generates the bulk of its volume in the mid?tier segment, is less able to pass on those costs than pure?premium rivals.

To blunt the margin squeeze, the company is rushing its next flagship series to market. The 17T line will be unveiled on May 28, roughly four months earlier than the previous generation. The base model starts at €749, offering a high?resolution AMOLED display, a 6,500?mAh battery, and for the first time a Leica Summilux lens system. The 17T Pro, priced at €999, adds wireless charging, a larger battery, and MediaTek’s Dimensity 9500 chipset. Both models are deliberately positioned below Apple’s and Samsung’s top?tier offerings, yet the move reflects a broader industry trend: group president Lu Weibing expects Chinese premium smartphones to break the $1,470 price point this year.

The earnings report itself will be a critical test. Xiaomi enters the quarter from a high base: last year’s full?year revenue rose 25% to roughly 457 billion yuan, with adjusted net profit climbing sharply. The electric?vehicle and AI segment, still nascent, grew revenue by more than 123% in the fourth quarter alone. But the core smartphone business, while still the biggest revenue driver, is now grappling with rising input costs and intensifying competition. Investors will scrutinize gross?margin trends in both handsets and autos, and any disappointment could accelerate the stock’s slide.

Just days after the earnings, on June 2, Xiaomi will hold its annual general meeting in Beijing. The board is seeking authorization to buy back up to 10% of outstanding shares — a maximum of 2.58 billion shares — and also to issue new stock if needed. Such a large buyback program would signal confidence, but it comes at a moment when external headwinds are building. China’s National Bureau of Statistics will release its latest purchasing managers’ index around the same time, adding another variable for investors to weigh.

The earnings will be published at 19:30 Beijing time on Tuesday, followed by a webcast where executives are expected to provide detailed guidance on margins. With chip costs rising, sales volumes falling, and the stock already under severe pressure, the path back to the 200?day line looks steep. The early phone launch and the potential buyback are defensive moves, but the market will want to see whether Xiaomi can still generate the profitability that once justified its premium valuation.