Xiaomi’s 60 Billion Yuan AI Bet Fails to Soothe Investors as Profit Plunge Sends Shares to 52-Week Low
30.05.2026 - 07:32:03 | boerse-global.de
The chasm between Xiaomi’s ambitious long-term strategy and the market’s immediate verdict has rarely been wider. Shares in the Chinese electronics giant scraped a 52-week low of 3.09 euros in Hong Kong on Friday, leaving the stock down 31.44% since the start of 2026 and 53% below its June 2025 peak. The sell-off comes even as the company unveils a premium smartphone series, accelerates spending on artificial intelligence and steps up share buybacks.
Xiaomi’s first-quarter earnings explain much of the pessimism. Revenue slumped nearly 11% year-on-year to 99.1 billion yuan, while adjusted net profit cratered 43% to 6.1 billion yuan — the first simultaneous decline in top and bottom lines in several years. Management blamed rising memory chip costs, brutal competition in the electric-vehicle segment and subdued global demand for smartphones.
Undeterred, the company is ramping up research spending. R&D outlays jumped more than a third to 9.0 billion yuan in the quarter alone. The bulk is earmarked for artificial intelligence: Xiaomi plans to spend at least 16 billion yuan on AI in 2026 and more than 60 billion yuan over the following three years. That bet is anchored in the upcoming HyperOS 4 operating system, due in July or August 2026, which will embed the company’s MiMo-V2.5-Pro large language model — already ranked among the best open-source models available.
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The vehicle division remains a cash drag. Xiaomi delivered 80,856 EVs in the quarter, lifting segment revenue 7% to 19.9 billion yuan, but the operating loss widened to 3.1 billion yuan. The business is still in its heavy-investment phase, soaking up capital that might otherwise support margins in the mature smartphone operation.
On the handset side, the company is pushing into higher price brackets. The new 17T series — featuring a Leica triple-camera system, a periscope telephoto lens and a 7,000mAh battery — starts at 749 euros in Europe for the standard model, while the 17T Pro, equipped with a 144Hz 6.83-inch AMOLED display and the MediaTek Dimensity 9500 chip, sells for 999 euros. Average selling prices in China hit a record 1,310 yuan in the first quarter, up 8.2% year-on-year, and premium devices accounted for 23.5% of domestic shipments. Xiaomi’s smartphone division generated 44.3 billion yuan in revenue on 33.8 million units, though the gross margin slipped to 10.1% due to component inflation. The broader smartphone × AIoT segment — the operational core of the business — posted 79.3 billion yuan in revenue with a much healthier 22.5% margin.
To signal confidence, Xiaomi bought back 298 million Hong Kong dollars’ worth of its own stock in late May, pushing cumulative repurchases since the start of the year past 8 billion HKD. Whether that, together with the 17T launch and the AI spending spree, can arrest the earnings decline will become clearer when second-quarter results are released — and when HyperOS 4 hits the market later this summer.
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