Xiaomi's Stock Sinks to 52-Week Low as Record Buyback and Chip Milestone Fail to Distract from EV Losses

Despite record R&D spending and buybacks, Xiaomi shares tumble 53% YTD as EV unit loses $5,600 per car, smartphone shipments drop 19%, and analysts warn of further profit declines.

The disconnect between Xiaomi's engineering ambitions and its financial performance has rarely been wider. Shares in the Chinese tech giant closed at €2.71 on Thursday, just a whisker above the 52-week low of €2.67, after a steep sell-off that has wiped 39.6% off the stock since the start of the year. Over the past twelve months, the decline deepens to 53.4%. A daily share repurchase programme and the launch of its first custom 3nm chip have done little to stem the bleeding.

The electric-vehicle division remains the most painful drag. Xiaomi’s auto segment posted an operating loss of 3.1 billion yuan in the first quarter, the equivalent of roughly $5,600 for every car sold. Gross margins in the unit slipped to 20.1%, squeezed by price cuts and rising component costs. The company aims to deliver 550,000 vehicles this year, but through May it had moved only around 150,000 units. May sales actually dipped below the April level, meaning Xiaomi now needs to average more than 50,000 deliveries every month for the rest of 2026 — a threshold it has hit just once so far.

To make matters worse, the core smartphone business is also under pressure. Handset shipments fell 19% year-on-year to 33.8 million units in the first quarter, while adjusted net profit plunged 43.1%. Goldman Sachs expects the second quarter to bring an even steeper profit decline of 50%.

Xiaomi is ploughing enormous sums into technology independence. Research and development spending surged 33.4% to 9.0 billion yuan in Q1, and the full-year budget is set at 40 billion yuan. The company’s new Xuanjie-O3 processor, manufactured by TSMC on a 3nm process, marks a decisive move away from external chip suppliers. Meanwhile, the internal Smart Manufacturing Fund has reached its target size of 10 billion yuan under chairman Lei Jun, with roughly 40 investments already completed — including a 5.56% stake in lithium battery specialist Qingdao Yunlu New Energy.

Yet none of this has impressed equity markets. On the technical side, the relative strength index has fallen to 25.8, deep in oversold territory, but analysts caution that such readings alone do not constitute a buy signal. Jefferies downgraded Xiaomi to “Underperform”, citing margin compression and weak auto demand.

Even the Nürburgring has failed to shift sentiment. Xiaomi claims an autonomous YU7 SUV set a lap record without a driver, though an official time has not been confirmed. A manned YU7 GT earlier broke Audi’s SUV record. Those headline-grabbing feats, however, do nothing to slim the EV division’s losses.

The buyback programme provides another measure of desperation. Since June 2, Xiaomi has repurchased shares every trading day, accumulating 30.1 million shares — equivalent to 0.12% of total equity — under a scheme that can reach 20 billion Hong Kong dollars. The effect has been negligible.

Investors are now pinning their hopes on a clutch of near-term catalysts. The Xiaomi 18 Pro and 18 Pro Max are slated for a European launch without the customary six-month delay after their China debut, which could boost smartphone volumes. In the second half of the year, two new extended-range electric vehicle models are due to hit the market. The next critical checkpoint, however, is the second-quarter earnings report on 26 August, when investors will learn whether the company’s heavy bets on chips, cars and AI are finally translating into better numbers.