Xiaomi’s Jekyll-and-Hyde Rally: A Chip IPO Windfall Masks a 43% Profit Wipeout
Published on 07/28/2026 at 13:41 | Redaktion boerse-global.de
The market is betting on Xiaomi’s future, but the company’s present is telling a very different story. On Monday, the stock surged 8.11% to €3.24 — its highest level since early June — propelled by a spectacular IPO from a chipmaker in which Xiaomi holds a minority stake and the promise of a fresh SUV lineup. Yet beneath the rally lies a first-quarter earnings report that saw adjusted net profit collapse by 43.1% to 6.072 billion yuan, as soaring memory-chip costs and persistent losses in the electric-vehicle division ate deep into the bottom line.
A 500% IPO Pop and a New SUV Family
The immediate catalyst was the Shanghai debut of ChangXin Memory Technologies (CXMT), a memory-chip manufacturer where Xiaomi is an early investor. CXMT’s shares surged roughly 500% on their first trading day, a gain that rippled directly into Xiaomi’s stock. The Hang Seng Index also caught the wave, closing Monday at 25,207 points in positive territory, with Xiaomi emerging as the session’s best-performing blue chip with a 7.34% advance.
That momentum carried into Tuesday, fueled by an announcement from founder and CEO Lei Jun on Weibo teasing a “SkyNomad” technology launch scheduled for Thursday. Xiaomi Auto, the company’s vehicle unit, is set to unveil its new “Kunlun” architecture this evening at 7 p.m. local time, according to industry portal Gasgoo. The platform will feature a proprietary vehicle chassis, a range-extender system, and a safety concept. Two new SUVs will debut under the SkyNomad banner: the seven-seat N90 Max with a large range extender and the five-seat, all-wheel-drive N70 Max. Full specifications, pricing, and launch dates will be disclosed during the presentation.
The EV push is no sideshow. Xiaomi has raised its 2026 delivery target to 550,000 vehicles. In the first half of the year, it delivered 185,055 units, with 80,856 coming in the first quarter alone — a 6.6% year-on-year increase. But the division remains deeply unprofitable: it posted an operating loss of 3.1 billion yuan on segment revenue of 19.9 billion yuan in Q1, translating to a loss of roughly $5,600 per vehicle.
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The Smartphone Squeeze
While the EV story captures headlines, Xiaomi’s core smartphone business is under severe pressure. First-quarter shipments tumbled 19.2% year on year, hammered by a sharp spike in memory-chip prices. A module combining 12GB of RAM and 512GB of storage reportedly rose by around 1,500 yuan. Total revenue slipped to 99.142 billion yuan, and adjusted net profit cratered by 43.1% to 6.072 billion yuan.
Yet the company is fighting back with an aggressive target: it has raised its 2026 smartphone shipment goal from 90 million to 110 million units, leaning heavily on entry-level devices to regain volume. Research spending jumped 33.4% to 9 billion yuan in Q1, funding projects including the MiMo-V2.5-Pro AI model, which topped an open-source language model ranking. Additional product momentum could come from the ChinaJoy trade show in Shanghai starting Thursday, where Xiaomi’s Redmi sub-brand is expected to unveil its K100-series flagship, rumored to feature a Snapdragon 8 Elite Gen 5 chip and a 200-megapixel camera.
Buybacks, Layoff Rumors, and a Deep Hole
The rally has been supported by a buyback program launched in June, under which Xiaomi has already repurchased 79.8 million shares. The mandate allows for the acquisition of up to 2.58 billion shares, and the program is explicitly aimed at stabilizing the stock after sustained selling pressure. Reports from mid-July also suggested a phased reduction in headcount across the smartphone, automotive, and internet divisions. Xiaomi has denied mass layoffs, describing the moves as “regular team adjustments.”
Xiaomi at a turning point? This analysis reveals what investors need to know now.
Despite the recent surge, the stock remains deep in the red on a year-to-date basis, down 25.18% since January. It also trades 13.84% below its 200-day moving average. Over a 12-month horizon, the decline is even steeper at 45.14%. The volatility — annualized at 51.42% — reflects a market torn between speculative enthusiasm for the EV narrative and the harsh realities of a margin-squeezed core business.
Two Stories, One Stock
Xiaomi is effectively trading on two parallel narratives that have yet to converge. One is a high-octane tale of chip-IPO windfalls, Nürburgring prototypes, and a family-SUV blitz that has lifted the stock by more than a third in a month. The other is a grinding operational story of collapsing profits, rising input costs, and a loss-making EV venture that still burns cash at an alarming rate. The upcoming product keynote on July 30 and the second-quarter earnings release expected in August will test which of these stories carries more weight. For now, the market is betting on the future — but the present is not cooperating.
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