Xiaomi Stock Analysis Tells Many Interesting Stories!

Value Investing with Sven Carlin, Ph.D.•Sep 9, 2026

Summary

Sven analyzes Xiaomi as an Asian tech giant competing in smartphones, AI, and the electric vehicle (EV) market. He highlights that while the stock has dropped significantly, the competitive landscape remains fierce and rising input costs for memory are squeezing margins. Sven states that while Xiaomi's growth into EVs and robotics is interesting, these sectors are becoming commoditized, which often leads to poor returns on capital.

Sven compares Xiaomi's valuation to Tesla, suggesting that if it were priced with similar hype, its market cap would be in the trillions, yet it currently trades at a price-to-earnings (P/E) ratio of 19. Sven argues that for a value investor, a P/E of 19 is fair but not an absolute bargain. He emphasizes the importance of entry points, noting he prefers waiting for a P/E of around 9 or 10 for Asian stocks to ensure a margin of safety.

Xiaomi (XIACY): Sven describes Xiaomi as a strong global player that maintains a top position in smartphones but faces declining revenues and rising costs. While the company is expanding into EVs and AI, Sven warns that the heavy investments required could lead to an investment bubble. He suggests that a P/E of 19 is fair value and recommends staying on the sidelines until the valuation reaches a P/E of 10 or lower.

Apple (AAPL): Sven reflects on his 2016 investment in Apple when the P/E was 9, contrasting it with the current P/E of 36. Sven argues that even great companies should only be purchased at the right price and that Apple is currently too expensive for his value investing criteria. He states that investors do not need to own everything all the time and should wait for better price levels.

Tencent (TCEHY) / Prosus (PROSY): Sven mentions these companies as benchmarks for valuation in the Asian market. He notes that Tencent trades at a P/E of 15 and Prosus at a P/E of 9, illustrating that there are other opportunities with potentially better risk-reward profiles than Xiaomi's current valuation. Sven uses these examples to reinforce his strategy of waiting for significant discounts.

Mentioned Stocks

AAPL

Sentiment: HOLD

Reasoning: Sven points out that Apple's current P/E ratio of 36 is significantly higher than his preferred entry point. He recounts buying the stock at a P/E of 9 in 2016 and suggests that the current valuation does not offer the necessary margin of safety for value investors.

Loading chart...

TCEHY

Sentiment: HOLD

Reasoning: Sven mentions Tencent as an example of an Asian stock trading at a P/E of 15, which he views as a more attractive valuation comparison than Xiaomi, though he is currently waiting for even better opportunities in the market.

Loading chart...

XIACY

Sentiment: HOLD

Reasoning: Sven states that Xiaomi is currently fairly valued at a P/E of 19 but is not yet a bargain. He expresses concern over rising costs and intense competition in the smartphone and EV sectors. Sven prefers to wait for a P/E of around 10 before considering a buy.

Loading chart...