Xiaomi Stock Touches Fresh Low as Smartphone Margin Squeeze and EV Spending Overwhelm Product Gains

Xiaomi shares hit 52-week low at €3.05, down nearly 50% YoY, as smartphone margin pressure and heavy EV losses overshadow ecosystem expansion. Q2 earnings on Aug 26 are crucial.

The widening gulf between Xiaomi's product ambitions and its financial performance has sent shares to a new 52-week low, with the stock shedding 2.37% on Friday to close at €3.05. During the session, the price briefly touched €2.97, though other data points recorded a low of €2.98 and a steeper decline of 3.19%. The year-to-date loss now stands at over 32%, while the 12-month drop has reached nearly 50%, leaving the stock more than 54% below its 52-week high.

Investor anxiety stems primarily from the core smartphone business, where margin pressure is intensifying. Analysts forecast gross margins in the segment will fall below 8% by 2026, squeezed by rising component costs and fierce competition from Apple and Huawei. The first quarter of 2026, which ended on March 31, offered little reassurance: revenue came in at 99.1 billion yuan, down 10.9% year on year, while earnings per share halved from 0.44 yuan to 0.18 yuan. Consensus estimates for full-year EPS stand at 1.13 yuan, a level that looks increasingly ambitious.

To counter the smartphone headwinds, Xiaomi is accelerating its push into wearables, gaming, and smart home devices. The Redmi Watch 6, featuring a 2.07-inch AMOLED display with peak brightness of 2,000 nits and up to 24 days of battery life, is rolling out across Europe and Asia in NFC-enabled versions that support Mastercard and Visa payments. A Mini LED gaming monitor, the G Pro 27Qi, has launched in Italy, Spain and the UK, while an updated Mijia air purifier and a high-capacity power bank have been added to the smart home lineup in China. Meanwhile, a software update for the Xiaomi 17T Pro brings Quick Share compatibility with Apple's AirDrop, aimed at making the ecosystem more attractive to users invested in Apple's walled garden.

Yet the biggest drag on the stock is the electric vehicle business, which continues to burn cash at an alarming rate. Annual research and development spending exceeds 30 billion yuan, with capital expenditure of more than 25 billion yuan. Analysts question when, or if, this massive investment will turn profitable, and concerns over potential equity dilution from future capital needs are overshadowing the company's ongoing share buyback program.

Technically, the picture remains deeply bearish. The stock trades well below its 50-day moving average of €3.38 and far under the 200-day average of €4.31. The relative strength index sits at 36.5, indicating that selling pressure may be waning but has not yet produced a clear reversal signal. The next key test is the €3.00 level on a closing basis; a break below that psychological threshold could trigger further automated selling.

All eyes now turn to the second-quarter earnings report, due on August 26. Xiaomi needs to demonstrate that its expanding ecosystem can arrest the decline in revenue and profit. For now, the market is pricing in a continuation of the downtrend, with product breadth unable to compensate for a lack of convincing earnings momentum.