Xiaomi shares came back to life on Thursday after a difficult run, jumping more than 7% in Hong Kong as investors returned to technology names and looked again at the company’s fast-growing electric-vehicle business.
That is a strong one-day move, but it needs some context. Xiaomi stock remains well below the highs it reached over the past year, and investors are still trying to decide how much value to place on the company’s EV ambitions while its traditional smartphone business deals with tougher margins.
Thursday’s rally suggests the market has not lost interest in the growth story.
Hong Kong Tech Stocks Had a Better Morning
Xiaomi did not rise in isolation.
Hong Kong’s technology shares were broadly stronger as long-term US bond yields eased and investors became slightly more willing to take risk again.
The Hang Seng Tech Index moved higher, while Alibaba, Tencent, Meituan and other major technology stocks also gained.
Xiaomi simply moved much faster than most of them.
At one point it was up more than 5% while several peers were posting increases of closer to 1% or 2%. The stock later extended the gain above 7%.
That suggests the wider Hong Kong tech rally helped, but it was probably not the entire explanation.
Company-specific interest remains centred on cars.
Xiaomi’s EV Business Has Changed How Investors Value the Company
Only a few years ago, Xiaomi was discussed mainly as a smartphone and consumer-electronics company.
That description no longer tells the whole story.
Electric vehicles have quickly become one of its most important growth businesses, bringing a completely different type of investor attention to the stock.
The company delivered more than 104,000 vehicles during the second quarter of 2026, while EV and other newer businesses accounted for a growing share of group revenue.
Strong Orders Have Kept the EV Story Alive
Recent reports around the company’s SkyNomad programme pointed to tens of thousands of orders within a short period.
Early orders are not identical to completed deliveries, and investors need to keep that distinction in mind.
Customers can cancel. Production can take time to scale. Margins can look very different once discounts, factories and after-sales costs are included.
Even so, large order numbers give the market something tangible to work with.
The central question around Xiaomi electric vehicles has shifted.
It is no longer whether consumers want a Xiaomi-branded car. The question is whether the company can produce enough of them efficiently and turn demand into sustainable profit.
Xiaomi Has Been Spending Heavily on New Businesses
That growth comes with a cost.
Xiaomi’s second-quarter results showed just how expensive its transformation has become.
The company’s EV, AI and other new initiatives continue to require heavy investment.
Research and development spending has increased, with a sizeable portion now directed towards artificial intelligence and newer businesses.
The EV division is growing quickly, but the wider innovative-business segment has still been carrying operating losses as Xiaomi expands production and technology.
That is normal for a young automotive business to a point.
The issue investors will watch is how quickly those losses shrink as vehicle volumes increase.
A strong order book helps only if higher production eventually improves the economics.
Smartphones Are Still the Bigger Complication
The other half of Xiaomi’s story is less exciting.
Its smartphone business has been dealing with expensive memory components and difficult competitive conditions.
Second-quarter smartphone revenue weakened year on year, while gross margin came under pressure.
That matters because phones remain a core part of Xiaomi’s scale.
The company sells everything from smartphones and televisions to wearables, appliances and connected devices, and that ecosystem remains central to its brand.
A weaker handset market cannot simply be ignored because the car business is growing quickly.
That is one reason Xiaomi shares have remained volatile even when EV announcements have been strong.
The market is trying to value two very different businesses at the same time.
Management Has Been Buying Back Shares
Xiaomi has also been active in the market itself.
The company has carried out repeated share repurchases during 2026.
On October 2, it bought back about 4.11 million Class B shares for roughly HK$99 million, with the repurchased stock intended for cancellation.
Earlier company commentary put cumulative 2026 buybacks at more than HK$11 billion.
Buybacks do not fix operating problems, but they can send a useful message when management believes the share price does not fully reflect the value of the company.
They also reduce the share count once repurchased stock is cancelled.
The continuing Xiaomi share buyback programme therefore forms another part of the backdrop to the stock.
Today’s Jump Comes After a Difficult Stretch
The one-day rally looks more dramatic because the stock had been struggling beforehand.
Xiaomi closed October 8 at HK$23.66 after falling on both October 7 and October 8.
It had also dropped nearly 4% on October 2.
Even after Thursday’s rebound, the stock remains far below its 52-week high above HK$50.
That gap shows how much investor sentiment has changed over the year.
Earlier enthusiasm around Xiaomi’s expansion into EVs drove expectations very high. More recent concerns around handset profitability, new-business spending and the wider market have brought the valuation back down.
Thursday’s move recovers only part of that decline.
The Next Earnings Report Will Matter More Than One Trading Day
Xiaomi’s next financial results are expected in late November.
Those numbers should give investors more useful information than a single strong session.
EV deliveries will be closely watched, along with margins in the automotive business and any guidance on production.
The market will also want to know whether smartphone margins are stabilising as memory-cost pressure changes.
Internet services remain another important profit contributor because that business operates at much higher margins than hardware.
Put together, those figures will show whether Xiaomi’s increasingly diversified model is actually becoming stronger.
The Rally Reflects Optimism, Not a Finished Turnaround
The Xiaomi stock surge is notable because it shows buyers are still willing to return quickly when sentiment improves.
A better session for Hong Kong technology shares helped. So did the longer-running excitement around Xiaomi’s EV order momentum and the company’s aggressive share repurchases.
But the difficult questions have not gone away.
The smartphone business needs steadier margins. EV production has to keep scaling. New businesses eventually need to contribute profit rather than only growth.
That is why Thursday’s 7%-plus jump should probably be read as renewed confidence rather than proof that every problem has been solved.
Xiaomi has successfully turned itself into something more complicated than a smartphone maker.
Investors are now deciding whether that complexity deserves a higher valuation.
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