Xiaomi Shares Sink to 52-Week Low as Memory Costs and EV Losses Compound

Xiaomi shares hit 52-week low as smartphone margins shrink from AI-driven memory chip prices and EV division burns cash, with Jefferies and Goldman Sachs warning of further downside.

Xiaomi’s stock tumbled another 3.25% on Monday to EUR 2.63, briefly touching a fresh 52-week trough at EUR 2.61. The decline brings the year?to?date loss to over 41%, with the Relative Strength Index plunging to 23.4 – a level that signals severe oversold conditions. Investors are punishing the Chinese electronics and electric vehicle maker on two fronts: soaring component costs that are squeezing its core smartphone margins, and a cash?hungry EV division that is bleeding red ink.

The hardware side looks increasingly precarious. Surging prices for memory chips, driven by the global AI boom, now account for more than half of a smartphone’s material costs. That is a direct threat to Xiaomi’s traditionally aggressive pricing strategy, and the impact is showing up in the numbers. Last quarter, total revenue fell nearly 11% year?on?year to RMB 99.1 billion, while diluted earnings per share collapsed. Analysts at Jefferies see little respite: Edison Lee downgraded the stock to “Underperform” and slashed the price target to HKD 25.49, arguing that the company’s targeted smartphone margin of 8% is all but unattainable.

The pain is not confined to the mobile business. Xiaomi’s fledgling electric?vehicle arm posted an operating loss of RMB 3.1 billion in the first quarter – roughly USD 5,600 for every car it delivered. Compounding that, the group is falling short of its own delivery targets. Management aims to hand over 550,000 vehicles this year, but only about 150,000 units were delivered in the first five months. Jefferies has trimmed its full?year forecast to 495,000, noting that monthly production would need to exceed 50,000 units from now on – a pace the bank deems unrealistic.

Goldman Sachs is even more bearish on the near?term earnings outlook. The broker expects adjusted net profit to slump by as much as 50% in the current quarter, following a 43% drop at the start of the year. Research spending alone hit RMB 9 billion in the first quarter, and the combination of rising hardware costs and EV losses is pressuring margins from every direction. The market is bracing for the second?quarter results due on August 26, when management will have to show how effectively it can cushion the impact of the memory?chip surge.

Xiaomi’s response is a multi?pronged product offensive. The flagship 18?series smartphones, expected in September, are rumored to feature a 200?megapixel camera, a dedicated AI button, and batteries as large as 8,500 milliampere?hours. The company is also pushing deeper into the electric?vehicle space with the Sky Nomad N90, a large SUV equipped with a range?extending combustion engine and a combined range target of over 1,500 kilometers. Deliveries are slated for the fourth quarter. On the software front, HyperOS 4 – built on Android 17 and scrapping the old MIUI code – is set for a global rollout in October, promising deeper AI integration and enhanced privacy tools.

For now, none of these initiatives are reversing the stock’s trajectory. The shares are hovering barely above their 52?week low, and the RSI reading of 23.4 points to a market that is technically exhausted but still searching for a catalyst. With the Q2 print just weeks away, the focus will be on whether Xiaomi can stabilise its operating margin – or whether the current low marks only a way station on a longer slide.