Xiaomi's EV Sparkle Can't Mask Smartphone Slump as Q1 Earnings Test Looms

Despite EV breakeven, flagship launches, and record buybacks, Xiaomi stock has lost 26% YTD. All eyes on May 26 earnings for EV margins, cash burn, and new model orders.

Xiaomi has turned its electric-vehicle business profitable faster than many established automakers, launched a flagship smartphone with a 200-megapixel Leica camera, and bought back roughly 380 million shares since June 2025. Yet its stock has lost more than a quarter of its value since the start of the year and sits 50% below the 52-week high of €6.69. That disconnect between operational milestones and market sentiment sets the stage for the company's first-quarter earnings on May 26.

Management tried to shore up confidence with a conspicuous buyback on May 12, acquiring about 3.2 million shares on the Hong Kong exchange for roughly HK$100 million at prices between HK$31.36 and HK$31.58. The programme, authorised at the June 2025 annual general meeting, has accumulated about 1.46% of total share capital. So far this year Xiaomi has spent HK$4.7 billion on buybacks, up from HK$6.3 billion in the prior year — a clear acceleration in the pace of repurchases.

Analysts are divided on what the quarter will reveal. Citigroup forecasts a steep decline, modelling an adjusted net profit of 5.9 billion yuan — a 45% drop year-on-year — on total revenue of 98.4 billion yuan, 12% lower than a year ago. The bank blames weak smartphone sales and margin pressure in the EV segment from government purchase subsidies. JPMorgan takes a more constructive view, predicting revenue between 99 billion and 101 billion RMB and flagging that adjusted net profit could beat consensus estimates. The consensus itself sits at roughly 100.8 billion CNY in revenue and earnings per share of 0.175 CNY.

Product launches have not lifted the stock. On May 21, Xiaomi unveiled the Xiaomi 17 Max — equipped with a Snapdragon 8 Elite chip, a 200-megapixel Leica camera and an 8,000 mAh battery — alongside the YU7 GT SUV and other devices. The EV division, which hit breakeven ahead of schedule, delivered over 30,000 units in April, up from 21,440 in March. The company has set a target of 550,000 deliveries for 2026, representing roughly 34% growth from the prior year. One analyst called the auto business a "surprise profit generator," but noted the capital intensity of the sector remains a drag on margins.

Investors remain unconvinced. The stock currently trades at €3.31, about 26% below its level at the start of the year and more than 50% below the 52-week peak of €6.69. The spread to the 200-day moving average is roughly 26%, signalling persistent bearish momentum.

What matters most on May 26, according to analysts, is three-fold: margin trends in the EV business, cash consumption, and the order pace for new models. The cash-burn question is especially critical — Xiaomi is building a second, even more capital-intensive business while its core smartphone operation shows signs of fatigue. Any evidence that the auto arm can generate sustainable cash internally could shift the narrative.

The earnings release will be followed by the global launch of the Xiaomi 17T series on May 28 and the annual general meeting in Beijing on June 2. Whether Xiaomi can convert its strong product lineup into better profitability — particularly in the high-end smartphone segment where the Xiaomi 17 Pro Max led the market above 6,000 RMB in China last year — will determine if the stock can finally reverse its slide.