The numbers from Tuesday’s report were, by any conventional measure, poor. Adjusted net profit of 6.2 billion yuan marked a 42.6 percent year-on-year decline, missing the 6.6 billion yuan analysts had penciled in, while revenue slipped 6.1 percent to 108.9 billion yuan. Yet the stock rose 8.3 percent in the sessions that followed.
That disconnect tells you everything about how the market now prices Xiaomi. The smartphone business, once the core of the investment case, has become almost an afterthought. The valuation story has shifted decisively to the car — and, increasingly, to the robot.
A Milestone That Overwhelmed the Bad News
Just a day before the earnings release, Xiaomi EV announced that cumulative deliveries of the SU7 series had crossed the 500,000-unit mark, reached in exactly 28.5 months since launch. The company also flagged “enthusiastic” pre-orders of more than 100,000 units for its new SkyNomad electric SUV line. Second-quarter deliveries of 104,199 vehicles marked the sixth consecutive quarter of growth.
That combination of a hard milestone and a forward-looking promise simply drowned out the profit warning from the legacy handset business. It is a striking shift: Xiaomi is now traded as an EV bet, not a consumer electronics stock.
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What makes the reaction particularly notable is that the growth story investors are buying into is still burning cash. The “Smart EV, AI and Other New Initiatives” segment grew revenue 17.1 percent to 24.9 billion yuan, but heavy research and development spending left it with an operating loss of 2.6 billion yuan. Anyone buying Xiaomi today is explicitly buying a loss-making division on the assumption that it will eventually carry the whole company.
The Robot Card
That assumption got a fresh boost in early August when Xiaomi released Robotics-1, an AI model trained on 100,000 hours of real-world data, as an open-source project. The company’s MiMo V2.5 language model, meanwhile, claimed the top spot in OpenRouter’s global ranking for open-source inference volume.
The robotics push went public in a big way at the World Robot Conference 2026 in Beijing, where Xiaomi showcased a 1.70-meter humanoid that, according to the company, has achieved a 98 percent success rate on assembly tasks in its own car factories. The presentation marked the official integration of robotics into Xiaomi’s “Human x Car x Home” ecosystem.
The market, however, was not impressed. On Tuesday the stock fell 2.8 percent to close at 2.79 euros. Over the past twelve months the shares have more than halved — down 51 percent — leaving them 23 percent below their 200-day moving average.
Should investors sell immediately? Or is it worth buying Xiaomi?
The Margin Squeeze Nobody Can Ignore
Behind the share price weakness sits a conflict that no amount of robot theater can resolve. Xiaomi has genuinely made the leap to premium in smartphones — average selling prices have hit record levels, driven by its flagship models. But sharply higher memory chip costs are eating the margin. Profitability in the core handset business has slipped into single digits. Xiaomi is selling more expensively and earning less.
The EV division, for all its good news on deliveries, remains a drag. The stock is down 36 percent since the start of the year, and despite the recent bounce, trades roughly 54 percent below its 52-week high of 6.54 euros, set in September 2025. Year-to-date, the shares are still down 30 percent.
Goldman Sachs, for its part, reiterated a positive stance on Tuesday, projecting 500,000 EV deliveries for full-year 2026 and a climb to 1.04 million units by 2028. That is a steep trajectory, but it explains why investors are willing to look past current EV losses: if scaling works as planned, the red ink should reverse as launch costs taper off.
Management added its own signal of confidence on the earnings call, confirming active share buybacks in the open market — a statement that leadership considers the current price undervalued regardless of the core business’s profit trajectory.
A Fragile Rally
Still, calling Tuesday’s jump a turning point would be premature. The SkyNomad launch, originally touted as a catalyst, has actually dragged the stock down 11.1 percent since its debut roughly three weeks ago. Euphoria over delivery numbers has repeatedly proven short-lived for Xiaomi in recent months.
The stock sits just 19 percent above its 52-week low, with a market capitalization of approximately 72.63 billion euros — a thin cushion that underscores how fragile investor confidence has become.
Two concrete tests loom in the coming weeks. The company presents its robotics division at the World Robot Conference through August 23, followed in September by the official SkyNomad market launch and the European introduction of its MIJIA smart-home brand at IFA 2026 in Berlin. Both events could fuel the narrative — or, if demand disappoints, deliver the next setback.
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The bigger question is whether the robotics fantasy can offset margin pressure in a core smartphone business that is losing substance. The answer depends less on technology than on how quickly Xiaomi can bring its cost base under control. The buybacks and the delivery milestones are real. So is the operating loss in the EV segment. The rally works as long as the milestones keep coming — the risk has always been the speed at which growth converts into actual profitability.
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