Xiaomi’s stock has plunged to a new 52-week low of €3.35, shedding over 25% of its value since the start of the year. This stark decline underscores the intense pressure on the company’s core smartphone business, even as it makes significant strides in artificial intelligence and electric vehicles. The immediate trigger is a painful but necessary decision: raising list prices for several smartphone models in its home Chinese market.
The price hikes, which include removing discounts and increasing the list price of models like the Redmi K90 Pro Max by 200 yuan, are a direct response to soaring memory chip costs. The financial strain is already severe. Xiaomi’s smartphone segment gross margin collapsed from 12.6% to 8.3% in the fourth quarter. Analysts at TrendForce warn the situation will worsen, forecasting that DRAM memory prices could surge by up to 63% and NAND flash by 75% by the second quarter of 2026, with no relief expected before 2028.
In a bid to shore up market confidence, Xiaomi’s management initiated a share buyback program in early April, spending approximately HK$395 million to repurchase 12.8 million of its own shares. This move was accompanied by substantial capital inflows from institutional investors on the Chinese mainland.
Amid this smartphone sector turmoil, Xiaomi’s forays into new technology are gaining tangible traction. The company’s large language model, MiMo-V2-Pro, has processed over one trillion API tokens, a milestone CEO Lei Jun confirmed. This volume, seen as evidence of sustained developer engagement rather than fleeting curiosity, propelled the model to the top of the usage rankings on the developer platform OpenRouter, outperforming models from Claude, Gemini, and DeepSeek.
Should investors sell immediately? Or is it worth buying Xiaomi?
The model’s performance is notable in key benchmarks. It ranks 8th globally and 2nd among Chinese LLMs on the Artificial Analysis Intelligence Index. In other tests, it has achieved a Top 5 global ranking in Text Arena, 4th place in LabRank, and 5th worldwide in Code Arena. To monetize this success, Xiaomi officially entered the API market in early April with its TokenPlan, a subscription model that charges usage in credits across four tiers ranging from 39 to 659 yuan per month, featuring an 88% discount for first-time purchases.
Simultaneously, the electric vehicle division is accelerating. After delivering over 410,000 units last year, Xiaomi is targeting an ambitious 550,000 vehicle deliveries for 2026. The upcoming performance-oriented YU7 GT was recently spotted undisguised at the Nürburgring, boasting 738 kW of total power, a 705 km range, and dual-motor all-wheel drive, with an expected price between 450,000 and 500,000 CNY and a likely market launch in the first half of the year.
The stock’s dramatic fall has left it trading at a price-to-earnings ratio of around 17, a fraction of the valuation commanded by a company like Tesla. Whether this gap closes hinges on Xiaomi’s ability to successfully monetize its AI strategy and scale its EV business fast enough to counterbalance the smartphone margin squeeze. The upcoming first-quarter results, due at the end of May, will provide the first concrete evidence of whether the early price increases and premium push can effectively cushion the blow from the memory chip cost crisis.
Ad
Xiaomi Stock: Buy or Sell?! New Xiaomi Analysis from April 13 delivers the answer:
The latest Xiaomi figures speak for themselves: Urgent action needed for Xiaomi investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from April 13.
Xiaomi: Buy or sell? Read more here...
