Xiaomi's Two-Speed Recovery: SUV Launch Timed to a Memory-Chip Thaw
Published on 08/20/2026 at 18:53 | Redaktion boerse-global.de
Investors weighing Xiaomi's prospects are being handed a study in contrasts. The company's electric-vehicle arm is accelerating toward its next product milestone, while its smartphone division — battered by record component prices — is finally seeing relief on the cost front. The convergence of those two narratives has put a floor under the stock after a bruising stretch.
The Beijing-based group confirmed it will launch its "SkyNomad" SUV series in September, marking its first foray into range-extender technology. The move targets families and broadens the lineup beyond the SU7 sedan, which has now racked up 500,000 cumulative deliveries since its debut roughly 28 months ago. A third model, the YU7, was unveiled in July, giving Xiaomi three distinct vehicle lines within two years of entering the automotive market.
Chip Costs Peak, Margins Set to Breathe
Management used the latest earnings call to signal that the worst of the memory-chip squeeze is over. Price increases on DRAM and NAND components are expected to moderate in the second half of 2026, a statement that carries weight given how much damage those costs have inflicted on the bottom line.
The adjusted net profit fell 42.6 percent year-on-year to 6.2 billion yuan in the second quarter, even as revenue climbed to 108.9 billion yuan. That top-line growth was powered by a premium push in smartphones and record EV deliveries — 104,199 vehicles in the quarter, up 17.1 percent year-on-year, generating 24.9 billion yuan in automotive revenue.
The EV division remains deeply unprofitable, posting an operating loss of 385 million US dollars, but the delivery trajectory is unmistakable. The auto business alone contributed 23.9 billion yuan to segment revenue, and the company is targeting 550,000 vehicle deliveries for the full year — an ambition that some analysts had questioned before the latest numbers landed.
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Smartphone Pain, Defensive Margins
The core handset business tells a more sobering story. Smartphone revenue slipped 7.5 percent to 42.1 billion yuan, with worldwide shipments falling 26.5 percent to 31.2 million units. The culprit is largely external: memory-chip prices have hit historic highs, squeezing every manufacturer in the space.
Yet Xiaomi managed to defend a gross margin of 8.5 percent in the segment, leaning on record average selling prices. Morgan Stanley, which reaffirmed its "Overweight" rating on Wednesday, sees potential for a positive margin surprise in the coming quarters — a sign that pricing discipline is holding up better than feared.
Group-level results remain mixed. Total revenue declined 6.1 percent year-on-year, the second consecutive quarter of contraction, though the pace of decline is slowing — sequentially, revenue rose 9.9 percent. Net profit fell 20.3 percent to 9.5 billion yuan, while adjusted net profit edged up 2.4 percent quarter-on-quarter.
Stock Recovers, Still Far From Highs
The market has responded favorably to the earnings and the SUV announcement. Shares have gained 7.6 percent since Tuesday's report, trading at 3.00 euros on Thursday with a slight 0.4 percent dip — a pause after the recent rally pushed the stock back above its 50-day moving average. The secondary article notes the stock sits 4.6 percent above that average, though it remains 54 percent below its 52-week high of 6.54 euros.
Beyond vehicles and phones, Xiaomi continues to refresh its broader hardware lineup. The company launched the "Xiaomi A27Qi 2026" monitor in Europe at 99 euros and unveiled the "Redmi Book 2026" laptop series in China. These products are financially minor compared to the core businesses but underscore the breadth of the IoT portfolio, which grew 26.7 percent quarter-on-quarter.
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The next major test arrives on November 24, 2026, when Xiaomi reports third-quarter results. By then, investors will have visibility on two fronts: whether the easing component costs translate into margin expansion, and whether SkyNomad can replicate the SU7's early success. For now, the stock's recovery suggests the market is willing to give the company the benefit of the doubt on both counts.
