---
title: "Driven by high-end positioning and physical AI, Xiaomi accelerates into a new cycle of value transformation"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/280552696.md"
description: "Xiaomi's AI strategy has entered a new phase, focusing on scaling applications from vision. The 2025 financial report shows total revenue of 457.3 billion yuan, a year-on-year increase of 25%, and a net profit of 39.2 billion yuan, a year-on-year increase of 43.8%. Xiaomi's full-stack layout covers technology, applications, hardware, and manufacturing, becoming a key example of the integration of AI and the real economy. As automobiles and AI become new growth engines, Xiaomi is expected to experience an accelerated transformation of its intrinsic value"
datetime: "2026-03-26T02:08:05.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/280552696.md)
  - [en](https://longbridge.com/en/news/280552696.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/280552696.md)
---

> Supported Languages: [简体中文](https://longbridge.com/zh-CN/news/280552696.md) | [繁體中文](https://longbridge.com/zh-HK/news/280552696.md)


# Driven by high-end positioning and physical AI, Xiaomi accelerates into a new cycle of value transformation

Entering 2026, the investment logic of global capital markets in the AI industry is undergoing a silent shift from "vision narrative" to "effect verification." Compared to the grand imagination of the future in 2024-2025, the current market is more focused on the clear paths of technology implementation, business closure, and financial returns.

Against this backdrop, Xiaomi (01810) is leveraging its rare strategic positioning advantage in China's AI ecosystem—an all-stack layout that spans the technology layer (large models, chips, operating systems), application layer (Miclaw/Miloco), hardware layer (mobile phones/IoT/cars/robots), and manufacturing layer (own factories)—which continues to attract concentrated market scrutiny.

Xiaomi's deep layout across key links in the industrial chain has transformed it from merely a consumer electronics or automotive company into a key sample for observing whether "the deep integration of AI and the real economy" can successfully establish a business model. Xiaomi's performance has transcended mere financial data, serving as a touchstone for testing the commercial viability of the all-stack AI model.

On March 24, Xiaomi released its performance announcement for 2025, providing a strong response to the market's demand for effectiveness with its historically strongest results. The financial report shows that Xiaomi's total revenue reached 457.3 billion yuan in 2025, a year-on-year increase of 25.0%; adjusted net profit was 39.2 billion yuan, a year-on-year increase of 43.8%.

![xmj1.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260326/1774490353114627.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

Behind the record highs in revenue and profit is the fundamental shift in Xiaomi's growth momentum: cars and AI have transformed from strategic investments into tangible new growth engines. Crucially, entering 2026, Xiaomi's accelerated progress in multiple fronts such as the MiMo large model, Miloco whole-house intelligence, and CyberOne humanoid robot marks that Xiaomi's AI strategy has entered a new phase of "from vision narrative to large-scale application."

At this point, the signal Xiaomi conveys to the market is clear enough: driven by the new growth engines of cars and AI, with the company continuously increasing its R&D investment and accelerating the push for AI into the physical world, Xiaomi, with its strategic ecological positioning advantage, is expected to experience an accelerated transformation of its intrinsic value.

Based on the robust fundamentals demonstrated in Xiaomi's impressive financial report and the company's growth potential in the new physical AI cycle, multiple brokerage firms and investment banks have released research reports expressing optimism about Xiaomi's future development. Among them, Goldman Sachs, Citigroup, and Huayin Securities have all given Xiaomi a "buy" rating, with target prices of HKD 41, HKD 42, and HKD 44, respectively. Referring to the opening price of Hong Kong stocks on March 26, Xiaomi's stock price still has more than 20% upside potential.

## Comprehensive Shift in Growth Momentum, New Breakthrough in High-End Strategy

Looking at Xiaomi's 2025 financial report, the coordinated development of various business segments has jointly driven overall performance to new highs. Among them, the IoT and lifestyle consumer products and internet services segments performed steadily, continuously playing a stabilizing role, contributing stable cash flow and profits, and effectively enhancing the group's resilience to risks During the reporting period, the number of connected devices on the AIoT platform increased by 19.3% year-on-year to 1.079 billion units, driving the annual revenue of the IoT and consumer products business to reach 123.2 billion yuan, a year-on-year increase of 18.3%. Internet services benefited from strong performance in overseas markets and a rise in global monthly active users to 754 million, with annual revenue recording 37.4 billion yuan, a year-on-year increase of 9.7%.

If the above two major businesses have continuously solidified Xiaomi's stable growth foundation, then the innovative businesses of smartphones, automobiles, and AI are the "main highlights" of Xiaomi's record-breaking performance, highlighting the significant effectiveness of Xiaomi's high-end strategy and greatly consolidating the brand's high-end perception.

By mid-2025, China's smartphone shipments are expected to be around 285 million units, a year-on-year decrease of 3.3%, showing a slight contraction overall, which intensifies internal brand competition. However, against this industry backdrop, Xiaomi's high-end smartphone sales have achieved a counter-trend breakthrough.

Data shows that in 2025, the sales proportion of Xiaomi smartphones priced above 3,000 yuan in mainland China reached 27.1%, a record high; the proportion of those priced between 4,000-6,000 yuan rose to 17.3%, continuing to improve year-on-year, driving the domestic high-end smartphone sales proportion to a record high.

At the same time, overseas high-end sales reached a new level: in 2025, Xiaomi's high-end smartphone sales in Western Europe grew by about 40%, with the sales proportion of the Xiaomi T series Pro version exceeding 55%; the starting price of the Xiaomi 17 Ultra Leica version in Europe is even higher than that of the 1T version iPhone 17 PM, yet it remains very popular.

The recognition of high-end products in the global market has driven Xiaomi's smartphone business to make steady progress, with annual revenue reaching 186.4 billion yuan in 2025, maintaining a position among the top three globally for five consecutive years.

In contrast to the steady progress of the smartphone business, Xiaomi's automotive performance in 2025 can be described as "phenomenal." It has rapidly risen from an industry newcomer to a mainstream player, showcasing strong product definition, ecological synergy, and operational efficiency with a combination of "dual blockbuster vehicles + rapid profitability," successfully entering a new stage of "scaled growth."

In 2025, Xiaomi's automotive deliveries exceeded 410,000 units, a year-on-year increase of 200.4%; while the average price rose to 250,000 yuan, it also drove revenue from smart electric vehicles and innovative businesses to surpass 100 billion yuan for the first time, reaching 106.1 billion yuan, a year-on-year increase of 223.8%, and achieving positive annual operating profit. By the fourth quarter, this segment's revenue proportion had risen to 32%, nearing that of the smartphone business, becoming the strongest growth driver for the group.

While achieving scale breakthroughs, Xiaomi's automotive high-end momentum has been fully released: the new generation SU7 sold over 30,000 units within three days of its launch, and the first supercar concept vehicle amazed the world. Xiaomi, in collaboration with GT, launched the Xiaomi Vision Gran Turismo, which garnered significant attention at WMC.

Xiaomi's supercar concept vehicle is the first Chinese brand invited to design by the renowned simulation driving platform GT, marking that Xiaomi's automotive division not only stands firmly in the mainstream in terms of sales but also begins to compete with top international brands in terms of innovation and brand momentum, with the company's high-end automotive strength gaining international recognition

## Implementing Long-termism and Steadfast Investment to Accelerate AI's Transition to the Physical World

If the comprehensive switch of the growth engine is a significant highlight of Xiaomi's 2025 financial report, then the continuous investment in research and development is the strategic cornerstone that solidifies its long-term competitive barriers and is the core foundation supporting the company's robust fundamentals and sustained growth.

By mid-2025, Xiaomi's R&D investment reached 33.1 billion yuan, nearly matching its annual profit, with a year-on-year increase of 37.8%. The total number of R&D personnel reached 25,457, a year-on-year increase of 20.1%. According to the latest financial report, over the past five years (2021-2025), Xiaomi has cumulatively invested 105.5 billion yuan in R&D. In the future, Xiaomi will continue to implement long-termism and steadfast investment, planning to increase its investment to 200 billion yuan over the next five years starting in 2026, with at least 60 billion yuan allocated to the AI field in the next three years.

![xmj2.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20260326/1774490379421920.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

Continuous R&D investment is driving Xiaomi's AI achievements towards comprehensive accelerated application, transforming AI narratives from concepts to demonstrable, mass-producible products, which has been prominently reflected since 2026. The most notable example is that Xiaomi's AI foundational model capabilities have entered the global first tier.

Recently, Xiaomi launched three self-developed large models designed for the Agent era, including the Xiaomi MiMo-V2-Pro. The Xiaomi MiMo-V2-Pro is Xiaomi's first trillion-parameter MoE model, specifically created for the Agent era. In the earlier testing phase, after the Xiaomi MiMo-V2-Pro was launched on the global API platform OpenRouter, it quickly topped the weekly usage chart within a week.

Supported by its powerful AI foundational model capabilities, Xiaomi's "full ecosystem of people, vehicles, and homes" is demonstrating unique competitive advantages, injecting stronger growth momentum into the company's entire business line. Among them, the system-level AI agent Miclaw, integrated into mobile devices, is expected to become a key differentiating barrier for Xiaomi in the AI smartphone competition.

In March of this year, Xiaomi officially launched the mobile Agent product Xiaomi Miclaw and began a small-scale closed testing. Compared to other AI execution solutions on the market, Xiaomi Miclaw's approach is fundamentally different.

Whether it was the previously explored "Doubao AI phone" in an independent hardware form or the open-source framework "Lobster" (OpenClaw), their development has been constrained by ecological games or security compliance challenges. The Doubao AI phone faced bans due to directly invoking system permissions and cross-application automation operations, touching on the traffic and commercial closed loop of super applications; "Lobster," as an open-source tool, primarily faces fragmentation and security risk issues Xiaomi's unique advantage lies in that Miclaw operates as a system-native application, allowing for deep invocation of the phone's underlying capabilities and permissions. This enables it to truly explore the implementation of large models from "dialogue interaction" to "system-level execution."

In terms of operational pathways, Xiaomi has encapsulated over 50 system-level capabilities (such as settings adjustment, permission management, cross-application data retrieval, etc.) into structured tools, which are dynamically invoked and orchestrated by the MiMo large model based on user intent. This achieves a paradigm shift for AI from "answering questions" to "completing tasks," establishing a fundamental barrier that cannot be replicated by any third-party applications or collaborative solutions, based on Xiaomi's full-stack capabilities of "chip - system - AI - ecosystem."

Market expectations suggest that, based on the unique advantage of Xiaomi Miclaw operating as a system-native application, its public launch is expected to produce stunning effects, redefining the standards for AI smartphones and consolidating the company's leading position in the next-generation smart ecosystem competition.

Huaxing Securities stated that it expects the commercialization of Miclaw on the flagship Xiaomi 17 series to strongly promote the optimization of Xiaomi's product structure and increase average selling prices, thereby partially offsetting the pressure from storage costs. It anticipates that Xiaomi's smartphone gross margin will bottom out between the third and fourth quarters of 2026 and accelerate recovery in 2027. Considering the operational leverage effect that has not yet been fully priced in by investors, this will translate into significant profit upside potential, leading to substantial profit margin recovery potential.

Xiaomi's exploration at the AI system level has not stopped at smartphones. In February of this year, at the MWC conference, Xiaomi showcased its future smart home exploration plan, Xiaomi Miloco, for the first time overseas. As the first system-level application of the MiMo large model in real-life spaces, Miloco aims to extend AI from the smartphone screen to the entire living space, achieving a leap from "individual intelligence" to "environmental intelligence." Its implementation marks that Xiaomi's AI capabilities are fully integrating into users' physical living scenarios.

This progress has strategic significance for Xiaomi's IoT business. The launch of Miloco signifies that the core competitiveness of Xiaomi's IoT business is upgrading from "scale and cost of connected devices" to "intelligent understanding of scenarios and proactive service." This is not only an iteration of products but also an evolution of the business model. When AI truly integrates into living spaces through Miloco, Xiaomi's IoT business will break through the linear growth logic of hardware sales, shifting towards achieving exponential value reassessment by enhancing the ecological value per user, expanding software services, and strengthening full-stack technical barriers.

The intelligent evolution of the IoT business does not occur in isolation; it relies on Xiaomi's vast user ecosystem and interaction entry points. With over 160 million monthly active users of Xiao Ai, this is one of Xiaomi's most critical strategic assets in the era of intelligent agents. This large and highly engaged user base reserves core resources in data, scenarios, user habits, and commercialization capabilities.

As industry competition shifts from a race of model parameters to the implementation of practical applications and ecosystem building, Xiaomi, leveraging this asset, has taken the lead in converting technology into scalable commercial value. It not only proves the success of Xiaomi's past AIoT strategy but will also become the most solid foundation for ushering in a new era of "ecological intelligent agents." At the same time, Xiaomi's AI capability layout has begun to systematically accelerate its extension into the mobile space. At the Xiaomi Spring New Product Launch on March 19, Xiaomi's end-to-end assisted driving welcomed a structural innovation empowered by large models—the official release of the Xiaomi XLA cognitive large model. It is characterized by "more modalities, higher efficiency, and greater control," pushing intelligent driving from the traditional "data-driven" paradigm to a new "cognitive-driven" paradigm.

This transformation will fundamentally reshape the relationship between humans and vehicles. The core idea is to evolve the car from a complex tool that requires users to learn and adapt into an "intelligent partner" that can actively understand the environment, anticipate needs, and seamlessly integrate into the user's life flow. Technology remains behind the scenes, while the experience moves to the forefront, truly achieving an upgrade from "humans adapting to cars" to "cars adapting to humans." This is not only a technological iteration but also a key move for Xiaomi to build long-term differentiated barriers in the smart car field.

In addition, Xiaomi has also made substantial breakthroughs in the humanoid robot business. In March of this year, Xiaomi's humanoid robot officially entered the Xiaomi automobile factory, starting its "internship" on the real production line—continuously operating autonomously for 3 hours at the self-tapping nut installation station, with a dual-side installation success rate of 90.2%, fully matching the production line rhythm requirement of 76 seconds. This marks a key step towards large-scale application.

This is not only a qualitative change from "technology demonstration" to "productivity verification," but also a concentrated embodiment of Xiaomi's "AI + hardware + manufacturing" full-stack capabilities. It proves with real production line data that humanoid robots have preliminary industrial practical value. With the advancement of future large-scale deployment, Xiaomi is expected to take the lead in running the commercial closed loop of humanoid robots in industrial scenarios and accumulate indispensable practical experience and data barriers for future entry into more complex scenarios such as homes and services.

## The physical AI explosion is imminent, and Xiaomi is expected to become an indispensable core target in the new cycle

The competitive landscape of AI applications is undergoing a fundamental shift. The vast majority of existing applications remain in the digital realm of processing text, images, and code, while the real industrial transformation and value explosion will occur in a new stage where AI perceives, understands, and directly manipulates the physical world—covering everything from robots and autonomous driving to intelligent environments with autonomous execution capabilities.

In this process of moving from virtual to physical, pure technical parameter advantages are not the decisive factor in the consumer market; the real moat lies in the scale of ecological entry and the depth of data accumulation. Only those platforms that allow AI capabilities to be used frequently by a massive number of users and continuously learn in rich scenarios can transform technology into sustainable commercial value.

From this perspective, Xiaomi demonstrates a unique strategic positioning. Its layout has surpassed single hardware, constructing a complete "perception-decision-execution" closed loop, achieving a full-stack layout that spans the technical layer (large models, chips, operating systems), application layer (Miclaw/Miloco), hardware layer (mobile phones/IoT/cars/robots), and manufacturing layer (own factories). This "human-vehicle-home ecosystem" linkage allows its AI to be rooted in the real physical world and user life flow from the very beginning of research and development, thus forming a solid strategic competitive barrier Currently, there is a growing consensus in the market that the leaders of the AI era are likely not new entrants starting from scratch, but rather the "existing giants" that have already established deep, frequent, and trustworthy relationships with users through mature ecosystems. This is because the future competition in AI is not only a contest of algorithms but also a comprehensive battle of ecosystem scale, scenario data, and commercialization pathways. With the deepest ecological entry, Xiaomi has the potential to nurture the strongest application-based AI in the future, and it is expected to become a core target that cannot be overlooked in the new cycle of physical AI

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