Xiaomi's Benchmark-Topping AI and Nürburgring Record Fail to Distract from a 43% Profit Plunge
Published on 06/19/2026 at 12:05 | Redaktion boerse-global.de
Xiaomi has plenty to crow about on the technology front. Its large-model team just launched MiMo Claw, a cloud-based AI agent that raked in a 63.8% task-completion rate on the Claweval benchmark while consuming 40% to 60% fewer tokens than rival systems. The agent, built on the house MiMo-V2.5-Pro model, is deeply woven into the Kingsoft office ecosystem, letting users create and edit Word, Excel, PowerPoint and PDF documents directly inside the interface. Xiaomi is also expanding free access from one hour to four hours daily, with paid TokenPlan subscriptions for heavy users.
Yet the stock market is paying no attention. The shares change hands at €2.69, barely above the 52-week low of €2.67 hit the previous day, after closing at €2.72 on Thursday. Year-to-date the stock has shed roughly 40% of its value.
The culprit is a brutal first-quarter earnings report. Revenue fell 10.9% to 99.1 billion RMB, but the real damage was on the bottom line: adjusted net profit collapsed 43.1% to 6.1 billion RMB. The smartphone division, still the company's core, saw revenue drop 12.5% as global shipments slid 19.2% to 33.8 million units, squeezed by rising memory costs.
Should investors sell immediately? Or is it worth buying Xiaomi?
The biggest drain, however, is the electric-vehicle business. The auto segment posted an operating loss of 3.1 billion RMB in the first quarter — equivalent to roughly $5,600 for every car it sold. Gross margin in the division has narrowed to 20.1% amid price cuts and more expensive components. Xiaomi wants to deliver 550,000 vehicles this year, but through May it had managed only around 150,000, with May sales actually falling month-on-month. To hit the annual target, the company would need to run at more than 50,000 units a month for the rest of the year — a pace it has achieved only once.
Management is trying to counter the pessimism with a record share buyback — up to 20 billion Hong Kong dollars, launched on June 2. So far the company has repurchased about 30.1 million shares. The program has done nothing to halt the slide. At the same time, research-and-development spending is being ramped up aggressively: outlays rose 33.4% year-on-year in the first quarter to 9.0 billion RMB, with a full-year budget of 40 billion RMB. Management is already penciling in a similar level for 2026.
Analysts are losing faith. Jefferies downgraded the stock to Underperform, citing shrinking margins and weak EV demand. Goldman Sachs expects second-quarter profit to plunge 50% from a year earlier. The technical picture is equally bleak: the relative strength index has fallen to 25.0, deep in oversold territory, but that alone has not been enough to attract buyers.
Even a headline-grabbing stunt at the Nürburgring hasn't shifted sentiment. Xiaomi claims an autonomous YU7 SUV set a lap record on the famed track without a driver — though an official time has yet to be confirmed — and the manned YU7 GT earlier beat Audi's SUV record. Such PR victories, however, do little to alter the numbers that matter. In the second half of the year, Xiaomi plans to launch two new extended-range EV models. The company needs a major volume boost from those vehicles to save its annual delivery target. For now, the market is waiting for the spending to translate into earnings — and nothing else will do.
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