Xiaomi’s Custom-Chip Pivot Meets a 24% Stock Rout as Board Prepares Q1 Reckoning

Xiaomi board meets May 26 to approve Q1 results as stock trades near 52-week low, balancing costly EV ramp-up and proprietary chip development against surging memory prices.

Xiaomi’s board of directors will convene on May 26, 2026, to approve the company’s first-quarter results, a meeting that arrives with the stock trading near its 52-week low and the group juggling a costly automotive ramp-up with a strategic push into proprietary chip design. The Hong Kong-listed shares closed last week at EUR 3.42, a decline of roughly 24% since the start of the year and nearly 49% below the summer 2024 peak.

The disconnect between operational ambition and market sentiment is stark. While the company dazzles visitors at the Auto China show in Beijing with its SU7 sedan, the new YU7 model and a high-performance variant, investors have remained unmoved. The stock touched a fresh 2026 low of EUR 3.38 in mid-April, and the distance to its long-term trendline now stands at almost 27%.

The Chip Gambit

At the heart of Xiaomi’s long-term margin strategy lies the Xuanjie O3, a homegrown processor built on TSMC’s 3-nanometer process. The chip is slated to debut in the upcoming MIX Fold 5, a foldable smartphone that skips a generational naming step after a one-year hiatus. The device will run on what is expected to be HyperOS 4.0, an operating system tailored to the new silicon’s networking capabilities and the foldable form factor.

Analysts view the vertical-integration push as an attempt to shore up structurally thin hardware margins. But the timing is treacherous. Memory-chip prices are surging: Samsung and SK Hynix have already raised prices by as much as 60% as capacity is diverted to high-bandwidth memory for artificial-intelligence applications. TrendForce forecasts DRAM prices will climb more than 50% this year, and industry analysts expect smartphone and laptop price tags to rise 10% to 20% in 2026. Rivals such as Lenovo have hedged through early stockpiling; Xiaomi’s exposure to the cost squeeze will become clearer in coming quarters.

EV Ambition Meets Heavy Spending

On the automotive front, management has set a delivery target of 550,000 electric vehicles for the full year. The mid-March facelift of the SU7 sedan generated more than 30,000 binding orders immediately after launch, underscoring strong demand. Xiaomi’s EV unit has reported a positive operating profit since the third quarter of last year — a milestone many pure-play EV makers take far longer to achieve.

Yet the costs are enormous. The company plans capital expenditure of more than RMB 40 billion in 2026, primarily directed at autonomous driving and artificial intelligence. A recent software update lowered the activation threshold for driver-assistance systems from 1,000 to 300 kilometers driven, and internal studies claim a roughly 30% reduction in accident rates when the systems are active.

AI Bragging Rights

In the AI arena, Xiaomi’s MiMo V2.5 Pro language model currently ranks first among open-weight models on the Artificial Analysis Intelligence Index. The company is expected to release the model weights as open-source software in the coming days, a move that could bolster its developer ecosystem but has yet to generate meaningful market enthusiasm.

Analyst Optimism vs. Market Reality

Despite the stock’s weakness, the analyst consensus sees a median price target of HKD 41.80, implying upside of roughly 30% from current levels. Near-term catalysts are thin: the Beijing auto show may provide some sentiment lift from visitor numbers and customer feedback, but the real test comes on May 26, when management must demonstrate that the heavy development spending is translating into promised returns.

In the coming trading week, concrete launch dates for the MIX Fold 5 will offer the first real gauge of whether the in-house chip strategy can reignite investor imagination. For now, shareholders are being asked to exercise patience as Xiaomi navigates a two-front battle between automotive scale-up and semiconductor self-sufficiency — all while the stock languishes near its floor.