Xiaomi’s Nürburgring Triumph and AI Splash Can’t Stop the Memory Cost Bleed

Xiaomi sets autonomous Nürburgring record with YU7 GT, but stock near 52-week low amid memory cost squeeze. Buybacks and new NAS product launch as profit drops 43%.

The contrast between Xiaomi’s ambitious milestones and its market performance has rarely been starker. A driverless YU7 GT has just set a certified autonomous record on the Nürburgring Nordschleife — yet the stock is trading near a 52-week low, hammered by a memory-cost squeeze that is ravaging its core business.

Autonomous Record and New Product Bets

On June 8, a Xiaomi YU7 GT lapped the Nürburgring Nordschleife in 10 minutes, 29.483 seconds — without a human behind the wheel. The company claims this is the world’s first certified autonomous EV record on the iconic circuit, achieved using Xiaomi’s in-house XLA artificial-intelligence architecture and its “MiMo-Embodied” model for real-time track analysis.

Alongside the automotive feat, Xiaomi is pushing deeper into the smart-home ecosystem. A new product dubbed “Xiaomi Smart Storage” will enter the network-attached storage (NAS) market via crowdfunding in China from July 1. Three configurations ranging from 4 TB to 16 TB will be available, all integrated into the HyperOS ecosystem for seamless access from smartphones, tablets and smart TVs.

The software itself is getting a radical overhaul. HyperOS 4 is set to launch in China in July or August, with a global rollout pencilled in for October 2026. The new operating system ditches legacy Android code in favour of Rust and Flutter — a move aimed at improving performance and security.

Buybacks Signal Management Conviction

Publicly available filings show Xiaomi has been aggressively buying back its own shares. On June 23 the company repurchased 8.4 million Class-B shares for 193 million Hong Kong dollars, following a 6.4 million-share tranche for 152 million HKD the previous day. Both batches are slated for cancellation, a move that market observers typically interpret as management’s belief that the stock is undervalued.

At the current price of €2.58, the shares have clawed back 1.65% from yesterday’s 52-week nadir of €2.51, but they remain down roughly 42% since the start of the year. The relative-strength index sits at 24.9 — a deeply oversold level that has historically preceded turning points. The gap to the 200-day moving average of €4.10 is nearly 37%, underscoring how far the stock has strayed from its long-term trend.

Core Business Under Siege

The fundamental picture offers little comfort. Memory-contract prices for smartphone components have surged sharply, while costs for television components have climbed tenfold. That structural pressure has already slammed Xiaomi’s bottom line. Adjusted net profit in the first quarter tumbled more than 43% year on year, while revenue slipped nearly 11% to 99.1 billion yuan — the first annual revenue decline in almost three years.

Smartphone shipments reached 33.8 million units in the quarter, a 19% drop. More than half of those sales came from models priced below $200, where higher component costs bite hardest. Xiaomi responded by raising prices on select models by as much as 30%, a move that immediately backfired: handset revenue sank to 44.3 billion yuan and the segment’s gross margin slumped to just 10.1%. Rivals Apple and Huawei held their pricing steady and picked up market share.

The pain extends beyond handsets. Xiaomi’s connected home-appliances segment contracted roughly 24%, partly owing to the expiration of government subsidy programmes.

An $8.7 Billion Bet on AI

In the midst of this earnings squeeze, Xiaomi is doubling down on artificial intelligence. Chief executive Lei Jun has committed at least $8.7 billion over the next three years to build out the company’s AI capabilities. The recent release of MiMo Code, a coding assistant, signals a direct challenge to established competitors. The underlying MiMo model family has been systematically expanded since April 2025, with the massive MiMo V2 Pro model arriving in March 2026, followed by the latest flagship series.

Yet the big-spending AI push has yet to lift the core business. Counterpoint Research estimates the memory-chip shortage will persist through the end of 2027, meaning the cost pressures that have crushed margins are unlikely to ease soon. Until they do, the stock lacks a clear operational catalyst for a sustainable turnaround — no matter how many records Xiaomi sets with its driverless cars.