Hedge funds are buying these two big tech stocks while selling two rivals
Investing.com-- Xiaomi Corp (HK:1810) shares slide to a seven-month low on Wednesday following a warning from the Chinese electronics giant on rising smartphone and chip prices and mixed third-quarter earnings.
Xiaomi shares slid 4.7% to HK$38.88, their weakest level since early-April. The stock was the worst performer and biggest weight on the Hang Seng, which fell 0.6% amid broader losses in tech shares.
The electronics giant’s revenue rose 2.3% in the September quarter to 113.1 billion yuan ($16 billion), but missed Reuters/LSEG estimates of 116.5 billion yuan.
Xiaomi’s third-quarter profit, however, surged 80.9% to 11.3 billion yuan, beating estimates of 10.3 billion yuan.
Smartphone and gadget sales remained strong in the quarter, while Xiaomi’s electric vehicle venture logged its first ever profitable quarter. The company clocked strong vehicle sales through the quarter, and even outsold Tesla (NASDAQ:TSLA) China in October.
But a major point of concern was a warning from the electronics giant that its smartphone prices were likely to rise further in the coming months, due to an unprecedented surge in global memory chip prices, due to their use in artificial intelligence infrastructure.
Xiaomi President Lu Weibing expressed concern over chip prices in a post-earnings call on Tuesday, and also warned that increases in smartphone prices for retail customers may not entirely offset the bump up in chip prices.
Xiaomi is the world’s third-largest smartphone maker by sales, behind Apple Inc (NASDAQ:AAPL) and Samsung Electronics Co Ltd (KS:005930). While the company has attempted to diversify into electronics and EVs, a bulk of its earnings still depend on smartphone sales.