Xiaomi's Robot Dream and Earnings Nightmare: Stock Rises 7% as Profit Drops 43%

Xiaomi's humanoid robot video boosted stock 7%, but Q1 revenue fell 10.9% and net profit dropped 43.1%, highlighting challenges in core smartphone business.

A brief video of humanoid robots working on an electric-vehicle assembly line sent Xiaomi’s stock surging roughly 7% in Hong Kong trading, but the rally papered over a first-quarter earnings report that showed revenue and profit both tumbling. The conflicting signals leave investors weighing the promise of futuristic robotics against the reality of a shrinking core smartphone business.

The footage, posted by chief executive Lei Jun on X, shows robots performing production steps that are still slower than human workers. The machines rely on a proprietary artificial-intelligence system called Xiaomi-Robotics-1, a multimodal model trained on more than 100,000 hours of real motion data. As the robots work, they log movements and adjust subsequent actions automatically, learning new tasks after only brief demonstrations. The company envisions deploying them beyond the car plant — packing smartphones, refilling office printers and loading washing machines, for instance. Analysts point to Xiaomi’s existing ecosystem of handsets, electric vehicles and connected home appliances as a natural springboard should it bring a reliable, affordable humanoid robot to market.

Yet the robot fantasy collides with a brutal quarter. In the three months ended March 2026, Xiaomi posted revenue of 99.142 billion yuan, down 10.9% from a year earlier, while adjusted net profit plunged 43.1% to 6.072 billion yuan. The smartphone segment, the company’s traditional cash cow, was the main culprit: handset revenue fell 12.5% to 44.3 billion yuan, and shipments dropped 19.2% to 33.8 million units. Gross margin in the mobile business narrowed to 10.1% from 12.4%, hammered by a 60%–70% quarter-on-quarter jump in memory-chip prices. Those components now account for about 60% of the material cost of entry-level devices. Xiaomi’s share of the global smartphone market slipped to 11% in the second quarter, according to Omdia, trailing Samsung at 22% and Apple at 20% — a sharp fall from the 15% it held a year earlier. The IoT division also suffered, with revenue sliding 23.7% to 24.7 billion yuan.

Management, however, is not retreating. Xiaomi has maintained a share buyback program worth up to 20 billion Hong Kong dollars that started on June 2 and runs for one year. As of mid-July, the company had executed 58 buyback transactions totaling more than 8.1 billion Hong Kong dollars. On July 17 it repurchased 3.8 million shares at prices between 26.88 and 27.00 HKD, and the next day added another 2.8 million shares for about 24.4 million HKD. The buyback has provided some support — after the earnings release the Hong Kong-listed stock initially fell 4.57% to 28.4 HKD — but it has not arrested the broader downtrend.

Meanwhile, Xiaomi is pouring money into electric vehicles and artificial intelligence. Its Smart EV & AI segment generated 19.9 billion yuan in first-quarter revenue, up 6.9% from a year earlier, on 80,856 vehicle deliveries. The operating result in the division nearly doubled quarter on quarter. In June, Chinese regulators approved Xiaomi’s first range-extended electric vehicle, a large SUV codenamed “Kunlun N3” that will be sold under the new SkyNomad sub-brand. At more than 5.3 meters long with a 3.1-meter wheelbase, it packs a 1.5-liter range extender and all-wheel drive via two electric motors, targeting a pure-electric range of 400–500 kilometers and a combined range exceeding 1,500 kilometers. Launch is set for the second half of 2026, with a price range of 20,000 to 45,000 yuan. On the AI front, the company plans to invest at least 16 billion yuan in 2026 and more than 60 billion yuan over three years. Its open-source language model MiMo-V2.5-Pro tied for first place in global benchmarks, while Xiaomi’s R&D workforce has swelled to 26,048 employees, with spending up 33.4% to 9 billion yuan in the quarter.

Despite the robot-fueled pop, the stock remains deep in the red over longer timeframes. After the Friday session in Hong Kong, the Frankfurt-listed equivalent closed at €3.03, down 1.43% on the day but still showing a 30-day gain of 8.57%. That monthly bounce does little to offset a year-to-date loss of nearly 30%, and the shares trade a full 20.66% below their 200-day moving average.

For now, the robot narrative gives Xiaomi a fresh story to tell investors, but the hardware prototypes are confined to a single factory floor. The company has yet to announce a commercial product or a timeline for broader deployment. Until the core handset business stabilizes — or the EV division begins to generate meaningful profits — the gap between Xiaomi’s ambitious future and its struggling present will remain wide.