Goldman Flags Xiaomi as “Consensus Short” Ahead of Q3 Earnings

Multiple funds now view Xiaomi as a “short-term consensus short / sell.

Goldman Sachs says Xiaomi has become a “consensus short” among institutional investors, with market sentiment turning cautious ahead of its third-quarter earnings.

According to a Goldman report, some institutional players have significantly increased bearish positions in recent weeks. The bank’s sales desk noted that major clients boosted their Xiaomi short positions by 53% over the past week.

Trading flow in the last two weeks has skewed toward outright selling, driven mainly by hedge funds and pension funds.

The report said multiple funds now view Xiaomi as a “short-term consensus short / sell.” Key reasons include a lack of clear catalysts for its auto business, safety concerns, construction delays at its factories, and the view that recent promotional efforts have yet to meaningfully lift EV sales.

A fatal Xiaomi SU7 accident earlier also exacerbated market pressure. Xiaomi shares had climbed to a short-term peak in early July but have since retreated more than 25%.

Xiaomi’s EV push initially drew strong attention, but optimism has since faded. Goldman’s research team recently cut its target price for Xiaomi by more than 10%, citing margin pressure from rising memory-chip costs.

Xiaomi will report third-quarter results on November 18. Bloomberg consensus expects revenue to rise around 23% year-on-year. Still, investors are focused on whether its auto business can deliver stronger support, and whether consumer electronics can sustain recovery.

Despite the bearish tilt, there are dissenting views. BOCOM International said Xiaomi’s auto business could reach an earnings inflection if deliveries continue to rise, potentially providing valuation support.

Lei Jun said publicly that Xiaomi EVs had delivered a cumulative 400,000 units since launch roughly 18 months ago, with monthly deliveries topping 40,000 units in both September and October. Skeptics, however, argue that sales growth has not fully addressed concerns about cost structure, supply-chain resilience and product safety.

On profitability, CICC offered a more constructive outlook, estimating Xiaomi’s auto business may have reached RMB 707 million ($99 million) in single-quarter profit in Q3, while Q2 automotive gross margin of 26.4% surpassed the 20.1% margin achieved by Li Auto, one of the few NEV startups already profitable.

Still, based on recent fund flows and sentiment, bearish voices remain dominant ahead of earnings, with investors awaiting further confirmation on profitability.