The Xiaomi stock price remained in a tight range this week as the recent momentum faded. It was trading at HKD 52.75 on Thursday, down by over 13% from its highest point this year, putting it into a correction zone. Will it resume the uptrend?

Xiaomi business is thriving

Xiaomi Corporation has silently become one of the biggest technology companies in the world. It has done that by disrupting the biggest companies like Apple and Samsung. 

Xiaomi has achieved that by targeting customers in China and the emerging markets, especially in India. Its brands like Redmi and Poco are known for having flagship quality at an affordable price. 

The company is now challenging Tesla, a company that disrupted the electric vehicle industry. It has already launched two hit vehicles and raised over $5 billion earlier this year to expand the business. 

The most recent results showed that Xiaomi’s business was thriving. Its revenue rose by 30% in the second quarter to RMB 116 billion, with its adjusted net profit growing by 75% to RMB 10.8 billion. 

Xiaomi’s two core businesses continued growing. The smartphone and its IoT segment made RMB 94.7 billion, up by 14.8% from the same period last year. 

Most only, the EV, AI, and other initiatives segment made RMB 21.3 billion, a 233% annual increase. Importantly, its gross margin of 26.4% was higher than the smartphone one of 21.6%.

The company believes that it is in its early days of growth, especially in the EV business, where it is initially focusing on the domestic market. It plans to start selling its EVs in Europe by 2027, where it plans to take on more established brands like Tesla and Volkswagen. 

The challenge, however, is that selling EVs in Europe will not be easy since its manufacturing plants are in China. As such, its EVs in Europe would face tariffs of up to 48%. The bloc has imposed a base tariff of 10% and levies ranging from 35% to 38% on other countervailing measures. 

Why the Xiaomi shares have stalled 

The Xiaomi stock price has remained under pressure in the past few months because of concerns that the smartphone business was slowing. This is happening because consumers are not replacing their phones as frequently as they did a while ago. 

In the past, it was common for customers to buy smartphones as soon as a new, upgraded model came out. Today, most of them stay with their phone until something breaks. Xiaomi now hopes to grow its market share in China by 1% each year. 

Xiaomi’s stock price has also stalled because of concerns about its valuation, which is higher than that of other companies in the industry. It P/E ratio of 25 is much higher than that of other top companies like Li Auto and BYD. 

Additionally, there are concerns that its EV ventures will meet with the reality of higher competition from other popular brands like XPeng and Nio.

Xiaomi stock price technical analysis

The daily timeframe chart shows that the Xiaomi share price has slumped from a high of H$61.50 in July to the current H$52.75. It formed a double-top pattern at $59.50 and a neckline at $36. Most recently, the stock has dropped below the 50-day Exponential Moving Average (EMA). 

Xiaomi stock has also formed a bearish flag pattern. Therefore, it will likely remain under pressure in the coming days. If this happens, it will drop to $40 and then bounce back later this year. 

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Meituan share price imploded today, Aug. 28, reaching its lowest level since September last year. This crash was a continuation of a downtrend that started in October last year, when it peaked at $217. It has now plunged by 52% to the current $103. 

Meituan share price crashes as pricing war continues

Meituan’s stock price plunged to its lowest level in months after the company’s results showed that its profit nosedived in the second quarter of this year.

Its revenue jumped by 11% to RMB 91.8 billion, continuing a trend that has been going on for years as demand for food and grocery deliveries jumped. Revenue also rose as the company boosted its marketing and incentives.

However, the company’s profits were almost wiped out. Its profit for the period slumped to RMB 365 million, down by 96.8% from what it made in the same period last year.

Meituan’s main issue has been the rising competition in the country, especially from JD, which launched a similar service recently. 

JD has embarked on a major expansion spree in the country by offering substantial discounts in a bid to capture market share. Most analysts and executives believe that these discounts, including those by Alibaba’s Ele.me,  are not sustainable. In a statement, Meituan said:

“Due to the irrational competition which started this quarter, operating profit decreased by 75.6% year over year to RMB3.7 billion, and operating margin decreased by 19.4 percentage points year over year to 5.7%.”

Most notably, Chinese officials have intervened to reduce the downward spiral at a time when the country is battling with deflation. They also mandated these companies to improve the living conditions of their couriers. 

In a statement, Meituan said that it has now expanded its occupational injury insurance coverage to all couriers. It is also offering summer heat subsidies and expanded its critical illness fund. While good, all these activities are expensive and affecting its profitability.

Will the Meituan stock recover?

Meituan share price has plunged in the past few months, and chances are that the downtrend will continue for a while. It is unlikely that its profit situation in China will improve in light of the current profitability issues. 

On the positive side, Meituan is making an effort to boost its growth. For example, the Instashopping platform is seeing strong demand as the number of InstMarts has jumped to over 50,000. It is also gaining market share in the in-store, hotel, and travel businesses.

Most importantly, Meituan is also expanding its business in the international markets through its Keeta product. The challenge is that even these markets are highly competitive. 

The most likely scenario is where the Meituan share price remains under pressure for a while and then rebound, possibly in 2026 as the situation stabilizes.

Meituan stock price analysis

The daily chart shows that the Meituan share price has plunged in the past few months. It has moved from a high of $216 in October to $102 today. The recent plunge happened as it formed a descending triangle pattern. 

Meituan stock has remained below the 50-day and 100-day moving averages. Also, the Relative Strength Index (RSI) has moved below the oversold level, while the percentage price oscillator (PPO) has moved below the zero line. 

Therefore, the stock will continue falling as sellers target the support at $95. The alternative scenario is where it rebounds and retests the resistance at $115 and then resumes the downtrend.

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Cambricon stock price has gone vertical this year and is now hovering at its all-time high. It jumped to a high of CNY 1,600, much higher than the year-to-date low of CNY 521.

Consequently, its market capitalization has jumped to CNY 664 billion, which is equivalent to over $92 billion. It had a market cap of below CNY 80 billion last year.

Why the Cambricon share price has soared 

Cambricon stock has surged because of the ongoing artificial intelligence tailwinds. This is notable since it is one of the top manufacturers of AI chips in the country. It also makes terminal intelligent processor smart chips and accelerator cards, and intelligent computing cluster systems. 

Donald Trump has helped to boost the Cambricon stock price by imposing export restrictions on NVIDIA, AMD, and other semiconductor companies. 

This, in turn, has pushed Beijing to push its local companies to invest more and build products that are competitive. As such, the country has not been very welcoming to NVIDIA’s H20 chips that are known to be less competitive. 

Beijing has been investigating these chips to see whether they have a backdoor that the US government can leverage. While NVIDIA has rejected the claim, the Trump administration has pushed it to do that so that it can track their locations. 

NVIDIA recently announced that it would pull H20 chips from the Chinese market and is now pressing the administration to allow it to sell more advanced chips there. The Trump administration will take a 15% cut from these profits. 

Cambricon, which is a state-owned firm, has use the trade tensions with the United States to gain market share in China by selling its cips to companies like Alibaba and Tencent. This is notable since China is the biggest market for these chips. 

Cambricon’s chips are less advanced than those that NVIDIA makes. However, the company is investing in R&D to bridge the gap. 

History shows that Chinese companies eventually catch up with their American rivals. A good example of this is in the electric vehicle industry, where companies like Byd and XPeng are making vehicles that are equally or even better than those made by Tesla and Rivian.

The Cambricon stock price rally is also being driven by retail investors, many who lack safer places to save their money now that the real estate market has collapsed. 

However, the risk is that the company has become highly overvalued, as it overtook Kweichow Moutai to become the most valued onshore company.

Cambricon stock price technical analysis 

Technical analysis shows that the Cambricon stock price has gone parabolic in the past few months. This surge has pushed it above the crucial resistance level at CNY 817, its highest level in March this year.

The risk, however, is that the stock has moved much higher than the crucial moving averages. For example, it is trading at CNY 1,600, while the 100-day moving average is at 749 and the 200-day EMA is at 638.

Therefore, there is a risk that the stock will crash because of a concept known as mean reversion, where it drops and moves back to the moving average.

The other risk is that the stock has become highly overbought, with the Relative Strength Index and the Stochastic Oscillator moving to extreme levels. As such, there is a risk that it may drop soon as investors start to take profits.

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SentinelOne stock price has imploded in the past few months, even as the cybersecurity industry has continued to grow this year. S peaked at $29.26 in December last year, reaching a low of $15.40 in April. It was trading at $17.15 as traders waited for its earnings.

SentinelOne earnings ahead

SentinelOne is a top company offering AI-powered cybersecurity solutions to clients like Aston Martin, Norwegian Airlines, Uber, Hitachi, Samsung, and ServiceNow. 

Its main platform is known as Singularity, which offers unfettered visibility, detection, and autonomous agents. This platform has grown rapidly in the past few years as demand for cybersecurity solutions has soared.

Data compiled by SeekingAlpha shows that the annual revenue rose from $93.1 million in 2020 to over $821.5 million last year. However, the main challenge is that the company has continued to lose money.

SentinelOne’s net loss stood at over $288 million last year. Its trailing twelve-month (TTM) net loss jumped to over $4265 million. 

The most recent results showed that the company’s revenue rose by 23% to over $229 million, with its annual recurring revenue surging by 24% to $948 million. This growth happened as more companies moved into its platform. 

The next important catalyst for the company will be its upcoming financial results. Analysts expect the upcoming results to show that its quarterly revenue will be $242 million, up by 21.73% from the same period last year. This forecast is in line with what the company guided in the last results.

SentinelOne’s earnings per share (EPS) is expected to come in at minus 19 cents, up from 22 cents. 

While its second quarter results are important, the SentinelOne stock price will react to its forward guidance for the third quarter. Its Q3 revenue is expected to be $255 million, up by 21% from the same time last year. 

Judging by other companies in the space like Okta and Palo Alto Networks, odds are that its guidance will be higher expectations. 

A key challenge is that SentinelOne stock price is still overvalued based on the rule-of-40 model. This is a common approach that looks at its revenue growth and its margins. 

SentinelOne’s business is expected to grow by 22% this year, while the non-GAAP operating margin will be between 2% and 4%. Assuming it hits the upper side of the range, then it has a rule-of-40 multiple of 26%, much lower than the key point at 40. 

On the positive side, the rule-of-40 metric based on the free cash flow (FCF) of 24% gives it a figure of 46%.

SentinelOne stock price technical analysis

The daily chart shows that the SentinelOne share price has crashed in the past few months, moving from a high of $29.25 in November to a low of $15.40. 

It has remained below the 50-day and 100-day moving averages, a sign that the bearish trend is continuing. On the positive side, it has formed a double-bottom pattern at $15.40, whose neckline is at $21.3.

The Percentage Price Oscillators (PPO) has formed a bullish crossover pattern. Therefore, the stock will likely rebound and possibly hit the 100-day moving average at $18.40. A drop below the support at $15.40 will invalidate the bullish outlook.

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