Xiaomi's Twin-Track Bet on AI and Hybrid SUVs Fails to Halt Stock's Slide to 2026 Low

Xiaomi's landmark AI model achieves record speed, but core business pressures—EV losses, chip costs, and falling deliveries—drive stock to year-to-date low. New hybrid SUV strategy aims to revive momentum.

Xiaomi has unveiled a landmark artificial-intelligence model that processes over 1,000 tokens per second on standard hardware, a feat the company calls a breakthrough. Yet the market’s reaction was anything but exuberant: the stock sank to a fresh year-to-date low just days later, underscoring deep operational concerns that technology alone cannot mask.

Developed with partner TileRT, the "MiMo-V2.5-Pro-UltraSpeed" model handles a trillion parameters at peak speeds of 1,200 tokens per second, running on eight off-the-shelf graphics cards. Xiaomi compresses data and optimizes compute routines to achieve this, and has released the underlying code publicly. High-speed access is currently available by application only, with a test phase running until June 23. Customers pay triple the standard tariff for ten times the throughput.

But the headline-grabbing AI progress comes as the company’s core business faces mounting pressure. In the first quarter of 2026, Xiaomi’s electric-vehicle and AI segment posted an operating loss of 3.1 billion yuan. Meanwhile, the smartphone division – still the group's main profit engine – is suffering from sharply rising costs for memory chips.

Those headwinds have battered the stock. In Frankfurt, shares closed last week at €2.89, down roughly 35% since the start of the year. The price touched a new 2026 low of €2.82 on Thursday. The distance from the 50-day moving average of €3.32 is widening, and a planned HK$20 billion share buyback has so far provided little support. The relative strength index of 32.6 signals an oversold market but no quick reversal.

Xiaomi is simultaneously pivoting its automotive strategy. After focusing solely on pure-electric sedans, the company will now enter the hybrid market with a new sub-brand, Skynomad, aimed directly at family SUV buyers. The first model, internally named Kunlun N3, is due in the second half of 2026 and offers an all-electric range of up to 500 kilometres. A small combustion engine acts as a range extender, addressing range anxiety. Xiaomi plans to undercut established rivals by roughly 200,000 yuan, a price attack that reflects urgency.

That urgency stems from slipping delivery numbers. Xiaomi set a target of 550,000 vehicle deliveries this year, but from January to May, deliveries grew just 13.5% year on year. In May, volumes actually shrank compared to the previous month – a sign that the company is losing momentum in China’s hyper-competitive EV market.

The Kunlun N3’s success will test whether Xiaomi can convert tech enthusiasts into family buyers. The end of the AI model’s test phase on June 23 will also determine whether the company can turn innovation into recurring revenue from paying customers. Until then, the stock remains trapped in oversold territory, with operational realities drowning out technological promises.