Xiaomi’s Stock Hovers Near Lows as a Dual Catalyst Week Tests Its Turnaround Story

Xiaomi shares near half their 52-week high as first-quarter earnings and a major auto show test the company's ability to fix smartphone margins and prove EV viability.

Xiaomi shares are trading at €3.32, roughly half the 52-week peak of €6.69 and down more than a quarter since the start of the year. That painful decline sets the stage for two pivotal events in the span of four days: first-quarter earnings on May 26 and a major appearance at the Shenzhen Auto Show on May 29. For investors, the twin test will be whether the company can arrest the margin erosion in its core smartphone business while convincing the market that its electric-vehicle ambitions are more than a costly distraction.

The Smartphone Margin Puzzle

Xiaomi’s full-year 2025 results already laid bare the tension between top-line growth and shrinking profitability. Group revenue surged 25% to ¥457.3 billion, and adjusted net profit jumped 43.8% to ¥39.2 billion. Net profit attributable to owners came in at ¥41.64 billion, nearly double the prior year. But the smartphone division—still the largest revenue driver—told a different story. Smartphone sales slipped 2.8% to ¥186.4 billion, and the average selling price dipped from ¥1,138.2 to ¥1,128.7 per unit, dragged down by lower prices in emerging markets even as China deliveries rose.

The gross margin for handsets contracted sharply from 12.6% to 10.9%, a squeeze Xiaomi attributed to reduced government subsidies, pricier components, and intensifying global competition. That makes the launch of the Xiaomi 17 Max a critical tactical move. The flagship, priced at ¥4,799, packs an 8,000mAh battery, a Leica-tuned triple camera with a 200-megapixel main sensor, and Qualcomm’s Snapdragon 8 Elite Gen 5 chip. For now, the device is exclusive to China, which is the proving ground for Xiaomi’s bid to lift the average selling price and restore margins. If the 17 Max gains traction, it could stabilise the smartphone margin ahead of the broader global rollout; if not, the earnings call on Tuesday will likely be dominated by questions about how management plans to reverse the trend.

EV Lineup on Display

Three days later, the company will mount its most comprehensive electric-vehicle showcase yet at the Shenzhen Auto Show. The SU7 family, including the high-performance SU7 Ultra, will be joined by the YU7 SUV series and the YU7 GT. The breadth of the lineup signals that Xiaomi intends to compete across multiple segments rather than rely on a single model. Yet the competitive backdrop is unforgiving: more than 100 automakers and 1,300 vehicle models will be on display. NIO is showing the ES9, Onvo is preparing pre-orders for the L60, and BYD’s luxury brand Yangwang is presenting an updated range. Price positioning and delivery capability will be compared in real time.

Xiaomi does have the financial firepower to sustain its dual push. As of December 31, 2025, the company held ¥26.9 billion in liquid assets and what it terms “cash resources” of ¥232.6 billion. The EV, AI and new initiatives segment—which includes the electric-car business—saw revenue leap nearly 224% to ¥106.1 billion last year. But capital discipline remains a challenge as the company simultaneously funds smartphone R&D, factory expansion, and the relentless competition in China’s auto market.

Technical Signals Bear Watching

The stock’s recent technical picture adds another layer of complexity. The relative strength index sits at 75.8, a reading that typically signals overbought conditions. That may sound incongruous given the stock’s fundamental weakness, but the RSI reflects a sharp bounce from the April low of €3.17. Whether that recovery is sustainable depends entirely on what the numbers show.

With Q1 earnings due Tuesday, investors will scrutinise whether the margin pressure in smartphones is easing, how the EV segment's spending is tracking against the ¥106.1 billion revenue base, and whether management’s view on the second half of the year justifies any reassessment of the stock. The conference call after the report will be the first concrete data point. The Shenzhen Auto Show three days later will provide the visuals. Between them, they could determine whether Xiaomi’s triple identity as a smartphone, AIoT and EV company is a source of strength—or simply three separate headwinds pulling in the same direction.