Xiaomi logo at an exhibition held in Hangzhou, Zhejiang Province, China on November 1, 2025.
Photo | Future Publishing | Getty Images
Chinese tech giant Xiaomi’s shares soared more than 2% in Friday trading after it announced a share buyback program worth up to HK$2.5 billion ($321 million).
The buyback plan comes as the electric vehicle and smartphone maker seeks to reassure investors amid increased competition, rising component costs and recent product safety concerns.
Despite Friday’s gains, Xiaomi stock is down more than 8% since the beginning of the year, reflecting continued pressure on the company’s valuation.
The company has regularly carried out share buybacks in recent years, and on January 13, it bought back 4 million shares for HK$152 million.
Critics of stock buybacks say the practice can boost stock prices without improving a company’s fundamental business. They argue that stock buybacks divert cash from other investments such as employee pay, factory expansion, job creation and innovation.
Xiaomi’s latest share buyback will begin on January 23 and will be carried out in the open market, subject to market conditions and regulatory approvals, according to a filing with the Hong Kong Stock Exchange late Thursday.
The Beijing-based company is one of China’s largest consumer technology companies with businesses in smartphones, electric vehicles, and smart home devices.
Analysts say the stock has faced pressure recently as a looming memory chip shortage threatens to raise component costs for the company’s consumer devices, especially smartphones.
“(The shortage) is causing margin compression for smartphone manufacturers, and many independent industry forecasters are lowering their outlook for smartphones,” said Dan Baker, senior equity analyst at Morningstar.
The memory shortage is expected to worsen this year as manufacturers continue to focus on growing memory demands for the AI industry and divert production capacity from electronics manufacturers.
“2026 will be a difficult year not only for Xiaomi but also for many Chinese (original equipment manufacturers) as domestic Android players remain the most vulnerable to chip shortages,” said Ivan Lam, senior analyst at Counterpoint Research.
Xiaomi’s stock price also came under pressure last year after reports of accidents involving its vehicles spread on social media. More broadly, the company has been affected by the ongoing price war in China’s EV market, which is weighing on profits across the division.
Regarding the EV business, investors were also disappointed by Xiaomi’s modest goal of delivering 550,000 cars in 2026, said Kaina Wong, a China technology analyst at City Research.
He added that the company’s car sales profit margin is likely to decline as the Chinese government’s EV subsidy policy changes in 2026.
Meanwhile, Xiaomi is investing heavily in long-term initiatives such as its internal semiconductor division. Last year, the company pledged to spend at least 50 billion yuan over the next 10 years starting in 2025 to develop its own chips.
Xiaomi also plans to expand its electric vehicle business globally in the coming years following the launch of the premium SU7 Ultra.
