Investing.com — Xiaomi is well positioned to emerge as one of the biggest beneficiaries of China’s AI-powered home appliance market, according to Morgan Stanley, which reiterated its Overweight rating and HK$45 price target, citing the company’s expanding AI ecosystem, smart home leadership and long-term growth potential.
The brokerage expects China’s AI home appliance market to grow from roughly $123 billion today to about $150 billion by 2030, driven by rising adoption of connected devices and higher average selling prices. It forecasts Xiaomi’s domestic AI home appliance revenue could exceed RMB200 billion by 2035, with overseas revenue potentially surpassing that figure.
Central to the bullish outlook is Xiaomi’s integrated ecosystem. Analysts said its portfolio of smartphones, wearables, televisions, appliances and electric vehicles positions the company to benefit as consumers increasingly adopt interconnected AI-powered devices through its HyperOS platform. The ecosystem also creates opportunities to increase customer spending by integrating multiple devices into a single user experience.
The report also pointed to Xiaomi’s expanding global user base as a key competitive advantage. More than one billion connected devices and a growing monthly active user base provide opportunities to cross-sell products and deepen customer engagement.
Its “Human + Car + Home” strategy is expected to create additional synergies across devices and strengthen its position against traditional appliance makers. Analysts also see international expansion as another avenue for long-term revenue growth.
Beyond hardware, analysts said the market continues to underestimate Xiaomi’s AI investments. Ongoing development of proprietary large language models, AI agents and software could become a more meaningful valuation driver as earnings growth accelerates through 2027 and 2028, supporting product differentiation, premium pricing and profitability.
Near-term concerns over rising memory chip costs were viewed as manageable. The report said management has already outlined measures including price increases and product mix improvements, with cost pressures expected to ease during the second half of 2026.
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