The Numbers Are Genuinely Impressive

Xiaomi had a real year in 2025.

Group revenue hit RMB 457.3 billion — the first time the company has cleared the RMB 400 billion mark, according to TipRanks via The Globe and Mail. That's a 25% jump year on year.

Adjusted net profit came in at RMB 39.2 billion, up nearly 44%. Overall gross margin reached 22.3%, up 1.3 percentage points from the prior year.

Smartphones alone pulled in RMB 186.4 billion — about 41% of total revenue — with 165 million units shipped globally. That gives Xiaomi a 13.3% market share and a firm lock on the global top three, per The Globe and Mail's reporting of the earnings call.

IoT revenue crossed RMB 120 billion for the first time, landing at RMB 123.2 billion, up 18.3% year on year. Tablets, wearables, smart appliances — all growing.

And then there's EVs.

The EV Story Is the Real Wild Card

Xiaomi's EV and AI/innovation segment generated RMB 106.1 billion in revenue — more than triple the prior year. That's 23.2% of total group sales now coming from a segment that barely existed a few years ago.

The company delivered 411,082 vehicles in 2025. The segment hit its first positive profitability milestone, per The Globe and Mail's coverage of the earnings call.

Xiaomi — a smartphone company — is now a car company generating over $14 billion USD in EV revenue annually. That's a structural transformation of the business.

So Why Are Hedge Funds Shorting It at Record Levels?

According to CN Wire on X, citing a Wednesday note from Goldman Sachs's sales desk, short interest in Xiaomi in Goldman's prime book jumped 53% in a single week. Goldman described shorting Xiaomi as "consensus among hedge funds" ahead of earnings.

Bloomberg confirmed the same trend — short bets on Xiaomi hit record highs heading into the earnings report, with cost pressures cited as the core concern.

The bears have real arguments. Management itself flagged them on the earnings call.

Surging memory chip prices are a direct hit to smartphone margins. You can't premiumize your way out of component cost inflation when it moves fast enough.

R&D and CapEx spending is heavy — the EV ramp and AI ambitions cost money. A lot of it. Xiaomi is investing in autonomous driving, AI-integrated devices, and next-generation hardware simultaneously. That's burning cash.

AI commercialization is early-stage. Management acknowledged it plainly: AI is a growth story for 2025–26, NOT a revenue driver today. Investors betting on AI monetization are betting on promises, not receipts.

What Mainstream Coverage Is Getting Wrong

Most financial media is framing this as a simple bull-vs-bear standoff: great earnings versus skeptical shorts. That misses the real story.

This is a bet on whether Xiaomi can actually execute a simultaneous three-front expansion — smartphones, IoT, and EVs — while absorbing cost pressure in ALL three segments at the same time.

That's a genuinely hard management challenge. The record numbers are real. The cost warnings are also real. Both things are true.

The mainstream framing also largely ignores the geopolitical dimension. Xiaomi is a Chinese tech company operating in a world of escalating U.S.-China tech competition. Western markets remain largely closed to it. Its EV ambitions face the same tariff walls battering every Chinese automaker trying to go global. That's a structural ceiling on growth that NO earnings call can talk away.

When Goldman tells clients that shorting something is "consensus," that's sometimes a setup for a short squeeze — not a guarantee the bears are right.

The Premium Push Is Real, But China-Dependent

Xiaomi's premiumization story is legitimate domestically. In Mainland China, 27.1% of smartphone sales came from premium models. The company gained share in the RMB 4,000–10,000 price range — roughly $550–$1,380 USD. That's not budget territory.

But premium share in China is NOT the same as premium brand status globally. Apple and Samsung still own that conversation everywhere outside of Asia. Xiaomi competes on value. The moment cost pressures force price hikes, that value proposition gets squeaky.

What Comes Next

Xiaomi put up numbers that most Western tech companies would kill for in 2025. The EV pivot is working faster than almost anyone predicted. Margins are expanding. The company is GROWING across every segment.

And yet — the cost structure ahead is genuinely concerning, the AI monetization is unproven, and hedge funds are betting against it at record levels with Goldman Sachs's backing.

Both the bulls and the bears have live ammunition here. Record revenue doesn't immunize a company from margin compression. The next two years will tell the real story.

Watch the memory chip prices. Watch the EV delivery numbers. Watch whether AI becomes a revenue line or stays a talking point.