Xiaomi’s Munich-Built Beast and AI Ambitions Can’t Lift a Stock Stuck at Rock Bottom

Xiaomi's stock plunges 53% to €3.17 in Frankfurt as a 990-horsepower German-engineered SUV, a top-tier AI model, and record buybacks fail to offset EV demand slowdown and smartphone margin collapse.

Xiaomi is firing on all cylinders with cutting-edge technology — a 990-horsepower electric SUV engineered in Munich, a trillion-parameter AI model, and a record-breaking buyback spree. Yet the market is unimpressed. The stock has cratered to a 52-week low of €3.17 in Frankfurt, shedding nearly 53% from its peak of €6.69. The disconnect between Xiaomi’s strategic firepower and its market reception has rarely been starker.

A German Touch for the YU7 GT

The company’s answer to flagging EV demand is the YU7 GT, a high-performance electric SUV unveiled at the Beijing Auto Show. The vehicle packs all-wheel drive, twin electric motors delivering a combined 990 PS, air suspension, torque vectoring on the rear axle, and a top speed of 300 km/h. Official sales are slated to begin at the end of May.

What sets this model apart is its pedigree. Xiaomi’s development center in Munich, staffed with veterans from Germany’s automotive elite, handled the engineering. Rudolf Dittrich, former technical director of BMW’s M Division and the man behind the M4 GT3, leads the center. Claus-Dieter Groll, who spent nearly three decades honing dynamics at the Nürburgring and across multiple BMW model lines, heads chassis development. The design team draws from Porsche, Lamborghini, and Mercedes-Benz, including Jean-Arthur Madelaine, a former project leader on the Mercedes-AMG Vision GT.

The timing of the GT launch is no coincidence. The standard YU7 hit a monthly delivery record of over 39,000 units in December, but by March that figure had slumped to roughly 13,600 — a drop of nearly a third from February. Xiaomi’s overall EV target for 2026 stands at 550,000 vehicles, up from about 412,000 last year. The GT is meant to reignite customer interest.

AI That Rivals DeepSeek — and Pays the Bills

On the software side, Xiaomi released MiMo-V2.5-Pro, its most powerful large language model to date. Built on a mixture-of-experts architecture with over one trillion total parameters, it is freely available under an MIT license. Citigroup ranks it among the top four globally for both general intelligence and agentic capability, and claims it has outperformed DeepSeek’s latest V4-Pro model on several benchmarks.

Monetization is already taking shape through three channels: higher-priced AI-integrated hardware, subscriptions for the MiClaw agent, and API access for developers. Crucially, 35% of MiClaw users are already paying customers — an early but concrete signal that the technology is resonating beyond the lab.

Smartphones Under Siege from Chip Costs

Xiaomi’s core smartphone business is facing a brutal margin squeeze. Memory chip prices surged by as much as 90% in the first quarter, and gross profit in the smartphone segment collapsed by over 40% in the final quarter of 2025. In response, the company is pulling forward the launch of the 17T and 17T Pro to the second quarter of 2026 — roughly four months earlier than usual. Global smartphone shipments fell 6% year-on-year in the first quarter of 2026, and rivals like Lenovo have cushioned the blow by building inventory early.

Buybacks Can’t Mask the Pain

Xiaomi has bought back HK$7.4 billion worth of its own shares since the start of the year — more than in all of 2025. In recent days alone, it spent roughly HK$200 million on repurchases. The buying has done nothing to stem the slide. The stock is down about 29% year-to-date and nearly 48% over twelve months.

Analysts are split. Goldman Sachs and Citigroup maintain buy ratings, pointing to AI integration and a clearer EV roadmap. JPMorgan stays neutral, arguing that margin pressure is real and that new business lines will take years to contribute meaningfully to earnings.

The next hard data point comes on May 26, when the board is scheduled to approve first-quarter 2026 results. Those numbers will reveal just how deeply the chip cost squeeze has cut into profitability — and whether the EV division managed to start the year in the black.