Xiaomi Pours Billions Into Buybacks and AI Talent as EV Unit Burns $5,600 per Vehicle

Xiaomi is doubling down on two fronts. The Chinese tech giant is spending heavily on stock repurchases and a global hunt for artificial intelligence specialists, even as its electric vehicle division bleeds cash and its core smartphone business wilts under rising component costs. The strategy reflects a management team convinced the stock is undervalued, but the data so far tells a tougher story.

Since the start of the year, Xiaomi has plowed nearly 10.9 billion Hong Kong dollars into buybacks, making it the third most aggressive repurchaser on the Hong Kong exchange behind only Tencent and the AIA Group. On June 26 alone, the company snapped up about 203 million HKD of its own shares, just ahead of Li Auto’s 200 million HKD. Many retail investors see such programs as a clear sign that executives believe the equity is too cheap.

The stock currently trades at around €2.48 in Europe, barely above its 52-week low. Year-to-date losses approach 45%, and the price sits more than 38% below the 200-day moving average. With a relative strength index of 22.6, the shares are deep in oversold territory. Short sellers remain active, and even the record buyback campaign has failed to reverse the slide.

The pressure on the stock is understandable. Xiaomi’s auto division posted an operating loss of 3.1 billion yuan in the first quarter of 2026, translating to a loss of roughly $5,600 per vehicle delivered. The company aims to ship 550,000 electric cars this year, but through May only about 150,000 units had left the factory. That gap has already prompted Jefferies to slash its full-year forecast to 495,000 units.

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To reignite demand, Xiaomi is launching a new sub-brand called Skynomad. Its first model, the N90, is a large SUV targeting the fast-growing "glamping" market and is scheduled for a fourth-quarter 2026 debut. The vehicle, a range-extender electric with a claimed total range of around 1,500 kilometers, will be priced between 200,000 and 450,000 yuan. Battery suppliers are being shuffled: Sunwoda and CALB will replace CATL and BYD.

The timing is risky. China’s range-extender vehicle market is slumping badly — wholesale sales plunged nearly a quarter in May, the steepest monthly drop in five years. Xiaomi is effectively betting against the prevailing wind.

Meanwhile, the core smartphone and IoT business is also under fire. Global shortages of memory chips are driving up component costs and crushing margins. In the first quarter, adjusted net profit fell 43%, and smartphone shipments dropped to under 34 million units, a decline of almost 20% — the worst among the top five global brands.

Xiaomi is responding by spending roughly 40 billion yuan on research and development this year. Founder Lei Jun recently outlined a strategy to weave artificial intelligence more deeply into the "human-car-home" ecosystem, connecting smartphones, electric vehicles, and home appliances. To staff that vision, the company has kicked off a global "Genie Talent" recruitment drive for top AI and connected-hardware engineers.

There are bright spots. In China’s online camera market, Xiaomi ranked number one in both volume and revenue in May. A new smart pressure cooker, the Mijia 2 Pro, launched at 899 yuan, shows the company’s knack for adding intelligence to everyday appliances rather than competing purely on price.

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But the broader environment remains hostile. Reports from peers Lenovo and Samsung suggest memory chip prices will stay elevated, squeezing hardware margins across the sector. Xiaomi’s cash pile gives it some cushion, and its willingness to deploy capital aggressively rather than hoard it is a clear statement of intent.

All eyes will turn to August 26, when the company reports second-quarter results. That will be the moment to see whether the combination of record buybacks, an AI talent push, and an ambitious — if costly — EV expansion can finally halt the stock’s slide.

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