Xiaomi is trying to win back investor confidence by spending up to $321 million to buy back its own shares. The Chinese tech giant announced the plan late Thursday, and its stock price jumped about 2% the following day. Even with this small win, the company’s shares have still fallen 8% since the start of the year.
The move comes at a difficult time. Xiaomi, which makes everything from smartphones to electric cars, is currently battling high costs and fierce competition. One of the biggest headaches is a global shortage of memory chips. Because the booming AI industry is hogging most of the chip supply, prices are going up for everyone else. Analysts warn that this will hurt smartphone makers’ profit margins throughout 2026, especially for Chinese brands that rely on Android.
Xiaomi’s new electric vehicle (EV) business is also facing some bumps in the road. While the company has big dreams, investors felt let down by its delivery targets for the coming year. On top of that, an ongoing price war in the Chinese car market and changes to government subsidies are making it harder to turn a profit. Some safety concerns also made the rounds on social media last year after videos of accidents involving Xiaomi cars went viral.
While buybacks can help support a stock price, critics argue that the money would be better spent on innovation or on higher employee pay. However, Xiaomi is already pouring massive amounts of cash into its future. The company plans to spend about $7 billion over the next decade to build its own semiconductor division. By designing its own chips, it hopes to avoid the supply chain issues currently dragging down the industry. For now, the buyback serves as a signal that Xiaomi is ready to defend its value while it navigates a tricky year ahead.
