Xiaomi’s Buyback Has Recaptured 13% Off the Lows, But the Memory-Chip Squeeze Still Haunts the 200-Day Line
Published on 07/04/2026 at 18:23 | Redaktion boerse-global.de
Xiaomi’s stock closed at €2.65 on the week, a 7.77% advance that marks the strongest rebound since the shares crashed to a 52-week low of €2.34 in late June. The catalyst is unambiguous: a record HK$20 billion buyback programme that has already scooped up 30.1 million shares since the start of June. Yet the rally has barely scratched the surface of this year’s brutal 41% sell-off, leaving the stock 33% below its 200-day moving average of €3.97.
The buyback pits the company squarely against a short-seller army that now controls 9% of the free float. The tug-of-war is raw: the management is pumping capital into the stock at an unprecedented pace, but the bears counter that the underlying business is being eaten alive by surging memory-chip costs. The result is a daily battle between the buyback’s floor and the shorts’ conviction, with the 50-day moving average at €3.06 providing the next technical hurdle.
The bull case rests on two fast-moving engines. Xiaomi’s electric-vehicle division has delivered more than 30,000 cars for three consecutive months, with first-half deliveries on track to reach roughly 180,000 units. The new Skynomad sub-brand lets the company slug it out in China’s price war without dragging the premium Xiaomi name into the discount fray. Meanwhile, the services segment continues to fatten margins, and premium smartphones such as the Xiaomi 17 Ultra are propping up average selling prices. On top of that, the company is doubling its budget for computing capacity, a clear bet that its artificial-intelligence strategy will generate future revenue.
Should investors sell immediately? Or is it worth buying Xiaomi?
The bear case, however, is anchored in the core smartphone business, where memory-chip costs are crushing gross margins. Xiaomi has already slashed its annual smartphone sales target from 135 million units to just 95 million, a painful admission that the competitive landscape has turned hostile. The cost pressure could persist through 2027, analysts warn. Meanwhile, the auto division remains a cash incinerator, booking an operating loss in the past quarter. Important components are getting drastically more expensive, and demand for specific models such as the SU7 is slipping. The stock’s volatility has widened to a 35% range, leaving it vulnerable to sudden setbacks.
The chart tells a story of two averages. The 200-day line at €3.97 is still a distant mountain, while even the 50-day average at €3.06 sits 15% above the current price. Any sustained recovery would need to first reclaim that 50-day level, then target the 100-day moving average at €3.37. That would require memory-chip prices to fall earlier than expected—or for Xiaomi to successfully pass on the higher costs to consumers.
The next concrete test for investors arrives in August, when Xiaomi reports second-quarter earnings. Until then, the monthly EV delivery figures will provide the near-term direction, and the buyback will continue to act as a speed bump to further declines. If chip costs remain elevated, the stock is likely to trade sideways between the yearly low of €2.34 and the €3 mark, with the buyback simply preventing a steeper slide rather than sparking a genuine trend change.
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