The frenetic pace of Xiaomi’s product launches — from smart fridges and noise-cancelling earbuds to an eye massager and a gaming smartphone — stands in stark contrast to the carnage unfolding in its stock. The shares closed at €2.46 on Friday, a fresh 52-week low of €2.34, extending the year-to-date rout to 45.23%. Over the past twelve months, the equity has shed 63.24% of its value, and the 14-day relative strength index has plunged to 19.8 — deep into territory that traders regard as heavily oversold.
The fundamental trigger for the sell-off is a sharp deterioration in profitability. Xiaomi’s adjusted net income collapsed 43% in the first quarter, while smartphone shipments contracted about 19% to just under 34 million units — a steeper decline than any major rival. The culprit is a surge in memory-chip prices, which in some cases doubled over the spring. With a price-sensitive customer base, the company has struggled to pass on those costs, squeezing the gross margin in its handset segment to little more than 10%.
Analysts have turned increasingly bearish. Goldman Sachs expects second-quarter earnings to tumble 50% from a year earlier. Jefferies downgraded the stock to “Underperform” and cut its price target to HK$25.49. A multi-billion-dollar share buyback programme has so far failed to staunch the bleeding: the company recently purchased about 30 million of its own shares, equivalent to just 0.12% of total outstanding capital. The market has shrugged off the repurchases entirely.
Should investors sell immediately? Or is it worth buying Xiaomi?
The drag is not limited to smartphones. Xiaomi’s fledgling electric-vehicle division posted an operating loss of 3.1 billion yuan in the first quarter, translating to a deficit of roughly US$5,600 per vehicle delivered. Weakening sales of the expensive SU7 Ultra are compounding the pressure. In response, Xiaomi is launching a new sub-brand, Skynomad, whose first model will be a large SUV with a combustion-engine range extender, priced at around 200,000 yuan and promising a total driving range of 1,500 kilometres. It is a risky bet: wholesale revenue from such hybrids plunged nearly 25% in May, marking the steepest monthly drop in five years.
Yet the company continues to flood the market with new gadgets. Two Mijia-branded refrigerators — a 186-litre unit selling for about US$123 and a 216-litre version at roughly US$138 — have been available since April 2026, both operating at a noise level of no more than 36 decibels. In the wearables space, the Redmi Buds 8 Active, offering active noise cancellation of up to 50 decibels and battery life of up to 11 hours (44 hours with the charging case), have been rolling out in Germany since June. A cheaper “Vitality Edition” version, priced around 119 yuan, promises 37 hours of total playback. Xiaomi is also testing a graphene-based eye massager with vibration, heat and Bluetooth connectivity through its Youpin crowdfunding platform.
Macroeconomic headwinds compound the operational strain. US Federal Reserve officials continue to signal a restrictive monetary policy until inflation is sustainably down to 2%, a structural drag on growth-oriented technology plays like Xiaomi. The stock now trades roughly 22% below its 50-day moving average and nearly 40% below its 200-day average.
On Monday, Xiaomi tried to reset the narrative with the domestic launch of its new gaming smartphone, the Redmi K90 Ultra. But genuine clarity on its financial trajectory will not arrive until August 26, when second-quarter results are due. If management fails to offer convincing answers on eroding margins, the €2.34 52-week low — already tested on Friday — could soon be breached.
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Xiaomi Stock: New Analysis – 28 June
Fresh Xiaomi information released. What’s the impact for investors? Our latest independent report examines recent figures and market trends.
