The biggest Chinese technology companies are underperforming the market despite the ongoing artificial intelligence boom. Xiaomi stock has plunged by 30% this year, while Tencent and Alibaba have dropped by 27% and 13%, respectively.
They have suffered steeper declines from their highest points last year. Xiaomi, which is widely seen as China’s answer to Apple, has tumbled by 55% from its highest point last year and is at its lowest point since December 2024. In contrast, Apple (NASDAQ: AAPL) has soared by 56% in the last 12 months, with its market capitalization hitting $4.60 trillion.
Alibaba, China’s equivalent to Amazon (NASDAQ: AMZN), is down 34% from its year-to-date high. Amazon, on the other hand, has soared by 33% in the last 12 months, with its market cap nearing $3 trillion.
Notably, the Hang Seng Tech Index, which is Hong Kong’s equivalent to the Nasdaq 100 Index, has dropped by over 26% from its highest point last year. The Nasdaq 100 Index is up by over 14% this year.
Xiaomi stock price has crashed hard in the past few months as concerns about its margins remained. The company is facing a major issue as prices of key components like memory soared.
As a result, its revenue and profits have plunged in the past few quarters. The most recent results showed that its revenue dropped by 10% in the first quarter to 99.14 billion yuan, while the profit for the period fell by 56.5% to 4.7 billion yuan.
The company also blamed the rising competition for the ongoing weakness in its business. Some of this weakness is coming from Apple, which has continued to gain market share in China.