Xiaomi Stages Weekly Rally as New SUV and AI Household Appliance Outlook Offset Weak Earnings
Published on 07/12/2026 at 09:14 | Redaktion boerse-global.de
Xiaomi shares notched their strongest weekly gain in months, propelled by a fresh product unveiling in the electric-vehicle space and a bullish call from Morgan Stanley on the company’s artificial-intelligence-powered home appliance business. The stock closed at €2.95 on Friday, up 5.21% on the day and 11.30% higher than a week earlier, pushing it 26% above its 52-week low of €2.34 reached on June 26, 2026.
The turnaround, however, has done little to reverse the broader slide. Xiaomi remains 55% below its 52-week high of €6.51 from September 2025, with a year-to-date loss of 34.31% and a 12-month decline of 52.45%. The 50-day moving average at €3.01 now lies just 2% above the current price, while the 200-day line at €3.89 remains a distant target. The Relative Strength Index sits at 60.6 — comfortably in neutral territory — and trailing 30-day volatility of 42.47% underscores lingering investor jitters.
Morgan Stanley analysts reaffirmed their "Overweight" rating and a price target of 45 Hong Kong dollars on July 12, arguing that Xiaomi is one of the prime beneficiaries of China’s growing market for AI-driven household appliances. That market is expected to expand from roughly $123 billion to about $150 billion by 2030. According to the bank, Xiaomi’s domestic revenue from such devices could exceed RMB 200 billion by 2035, buoyed by an ecosystem that includes over 1 billion connected devices and HyperOS. Cost pressures from memory chips, the analysts added, are manageable and should ease further in the second half of 2026.
Should investors sell immediately? Or is it worth buying Xiaomi?
The optimism on the appliance front comes as Xiaomi deepens its push into electric vehicles. On July 9, the company officially unveiled the "Sky Nomad" SUV series — known internally as Xiaomi Pengcheng — with the first model, codenamed Kunlun N3 and marketed as the N90, measuring over 5.3 meters in length and featuring EREV (extended-range electric vehicle) technology. That hybrid architecture uses a gasoline engine as a generator to extend range beyond 1,500 kilometers on the CLTC cycle. Configurations include five- and seven-seat variants and a camping edition with a pop-up roof. Reservations opened on July 9, with a market launch expected late in the third quarter of 2026. Xiaomi has denied reports that the vehicle will be sold below production cost, calling such claims "unscientific" and detached from reality.
The SUV rollout marks a significant departure from Xiaomi’s earlier two-model strategy centered on the SU7 sedan and YU7 crossover. Yet the company’s existing EV lineup faces headwinds. In the first half of 2026, Xiaomi delivered 80,496 SU7 units — a 48.30% drop year-on-year — while the YU7 contributed 104,559 vehicles, bringing total EV deliveries to 185,055. That leaves the group just 34% of the way toward its full-year target of 550,000 vehicles, a goal that would represent 34% growth over the roughly 410,000 EVs delivered in 2025. Xiaomi does not yet export its cars; European sales are not expected until 2026.
The financial strain of this dual-pronged expansion is visible in the latest quarterly figures. In the first quarter of 2026, revenue fell 10.9% to RMB 99.1 billion, while adjusted net profit plunged 43.1% to RMB 6.072 billion. Still, Xiaomi is ploughing ahead with investment, committing at least RMB 16 billion to AI development this year alone and aiming to surpass RMB 60 billion in AI spending over three years. Cash reserves stood at over RMB 220 billion at the end of the first quarter, providing a substantial cushion.
Whether the upcoming N90 can generate enough incremental volume to close the delivery gap — and how soon the cost of that ramp-up pressures margins — will determine whether the stock’s recent rally is a genuine breakout or a dead-cat bounce. For now, technical indicators offer room for further upside, but the mountain of fundamental challenges remains steep.
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