Xiaomi is juggling two starkly contrasting narratives. While the company tests an even more aggressive version of its SU7 Ultra electric sports car on the Nürburgring Nordschleife, its leadership has sounded the alarm on a sharp spike in memory-chip costs that threatens to squeeze margins in its core smartphone business. The stock reflected the mixed picture on Monday, climbing 2.47% to €3.11, a recovery from Friday’s close of €3.03 but still deep in the red for the year.
Spy shots that emerged on 18 July 2026 revealed an unconfirmed “Extreme” variant of the SU7 Ultra, featuring a “swan-neck” rear wing and an enlarged diffuser — modifications that signal an even more aggressive aerodynamic setup. The standard SU7 Ultra already delivers around 1,548 horsepower and sprints from 0 to 100 km/h in under two seconds. The new version appears designed to extend Xiaomi’s lap record for four-door EVs and take the fight directly to Porsche.
That automotive ambition contrasts sharply with the turmoil in Xiaomi’s traditional smartphone engine. Founder Lei Jun and president Lu Weibing have warned of an impending “memory crisis” in procurement markets. According to management, the cost of DRAM and NAND flash memory has risen by as much as 70% in the current quarter. Analysts are slightly more precise, estimating DRAM increases of up to 63% and NAND flash price jumps of over 70%. Xiaomi has already raised prices on select models, and industry watchers expect the company’s high-end smartphones to breach the 10,000-yuan mark by year-end — a significant move in a business that relies on thin hardware margins.
The cost shock arrives as the core business is already under pressure. In the first quarter of 2026, group revenue fell 10.9% to 99.14 billion yuan, while adjusted net profit tumbled 43.1% to 6.07 billion yuan. The sole bright spot was the automotive division, which delivered 80,856 EVs during the period. Despite the strain, Xiaomi continues its buyback program: it repurchased roughly 3.9 million shares on 15 July at an average price of HK$25.82, bringing total buybacks since 3 June to about 79.8 million shares. Partially offsetting that, the company issued 824,000 new shares between 2 and 15 July for employee equity plans.
Should investors sell immediately? Or is it worth buying Xiaomi?
Analyst opinions are divided. Goldman Sachs published a research note on 20 July highlighting significant growth potential from the global scaling of Xiaomi’s robotics division, though it did not disclose specific targets or ratings. Macquarie, by contrast, reiterated a “Hold” rating on 17 July with a target price of HK$30.70, seeing neither strong upside nor acute downside.
Long-term strategic moves remain on track despite the near-term headwinds. Xiaomi confirmed its first official appearance at Berlin’s IFA in September 2026 and plans to invest €7.4 billion in European AI research between 2026 and 2028. The company’s EV launch in Europe remains slated for the second half of 2027, with former Tesla manager Dieter Lorenz now leading the European supply chain effort. At the end of Q1 2026, Xiaomi held cash reserves of 220.6 billion yuan, providing ample firepower for both EV development and AI spending of at least 16 billion yuan this year.
The stock’s trajectory underscores the tension between optimism and reality. From its 52-week high of €6.51 hit in September 2025, the shares are still down 53.39%. Year-to-date, the decline stands at 28.20%, and the stock trades roughly 18.47% below its 200-day moving average. However, it has recovered more than a third from its June low, and the last 30 days have delivered a gain of 12.45%. The market will get a clearer read on the memory-cost impact when Xiaomi publishes its audited first-half results for Q2 2026 in August.
Ad
Xiaomi Stock: Buy or Sell?! New Xiaomi Analysis from July 21 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 July 21.
Xiaomi: Buy or sell? Read more here...
