Xiaomi’s Record Short Interest and Goldman’s 50% Profit Warning Overshadow $4 Billion Buyback
Published on 06/22/2026 at 17:25 | Redaktion boerse-global.de
The largest share buyback in Xiaomi’s history has so far failed to stem the bleeding. Since June 2, the company has spent roughly 20 billion Hong Kong dollars repurchasing its own stock, snapping up 30.1 million shares in the process. Yet the shares have tumbled nearly 20% over the past 30 days, hovering at EUR 2.63 — just three cents above the 52-week low of EUR 2.60. The year-to-date decline now stands at 39%, and short sellers have piled on to record levels, betting the pain is far from over.
Goldman Sachs warns the worst may still be ahead. The bank expects Xiaomi’s adjusted net profit for the second quarter to plunge by as much as 50%, following a 43% collapse in the first quarter to 6.07 billion yuan. Research and development costs alone hit 9 billion yuan in Q1, while a surge in memory chip prices — which have quintupled for smartphones and multiplied tenfold for TVs — is squeezing margins in the core handset business. CEO Lei Jun has indicated the cost pressure could persist for another two years.
Jefferies has already thrown in the towel. Analyst Edison Lee downgraded the stock to Underperform and slashed the price target to 25.49 Hong Kong dollars, arguing that the targeted smartphone margin of 8% is all but unattainable. With 62% of Xiaomi’s phone sales coming from devices priced under $200, the margin erosion is especially acute. Jefferies projects a five-percentage-point decline in handset margins for the full year 2026.
Should investors sell immediately? Or is it worth buying Xiaomi?
The electric vehicle division, touted as Xiaomi’s next growth engine, is instead bleeding cash. In the first quarter, the EV segment posted an operating loss of 3.1 billion yuan on revenue of 19.9 billion yuan — equivalent to roughly $5,600 lost on every car delivered. Delivery volumes are also falling short. Between January and May, Xiaomi handed over just 150,317 vehicles against an annual target of 550,000. In May, deliveries declined 11% month-over-month to 32,759 units. To reach even Jefferies’ reduced forecast of 495,000 units, the company would need to average more than 57,500 deliveries per month from June through December — a pace it has never achieved. Its best month so far was 50,000 vehicles in December 2025.
One potential bright spot is the software side. Xiaomi plans to unveil HyperOS 4 this summer, built on Android 17 and ditching the legacy MIUI code entirely. The operating system promises deep artificial intelligence features and enhanced privacy controls, with a global rollout scheduled for October. The company is also expected to bring the Xiaomi 18 Pro and 18 Pro Max to Europe by the end of September — earlier than usual — powered by Qualcomm’s Snapdragon 8 Elite Gen 6 on TSMC’s 2-nanometer process, though Xiaomi has not officially confirmed the launch.
For now, the market is fixated on the mounting losses. The relative strength index has sunk to 26.3, signaling an oversold condition, but that has not deterred short sellers, who are betting that the next quarterly print — due on August 26 — will deliver fresh bad news. The real question is whether the EV division can narrow its per-vehicle loss and accelerate deliveries, because at the moment, the buyback is doing nothing to stop the slide.
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