The stock is getting crushed.
I think a lot of people are moving money around due to AI. Not sure if this AI surge is a bubble or uncertainty. Likely a bit of both. Seeing a lot of redundancy in some of these AI platforms and apps. But I’m not a tech guy.
But there has to be something internally going on at Nike for that stock price drop. 48% in 12 months. Ouch!!
It’s very simple, actually.
Covid-19 giveth & it tooketh away. Covid-19 allowed Nike to profit well beyond any of their projections. If u notice, every report continues to use Nike’s all time high as a point of reference. Their stock has never traded that high in its entire history. It’s one of the few blue chip, split-stock companies which allows its price/share to be considerably lower than a traditional blue chip publicly traded company.
Nike’s stock from 2010-2019 avg. trade per share was $40. From 2020–2023, the shares ballooned to $112/share.
2020-2023 is the anomaly not the norm, but sensationalism in only focuses on the peak vs. their 15-20 yr history. The peak was due to the world being shut down, & Nike taking full advantage of the DTC model. Other brands suffered during this small window. However, Nike overplayed its hand under the previous CEO solely focusing on its DTC, while alienating wholesale partners that helped grow its brand to where it is.
Covid-19 brought about tragedy but also new found $$ (both legally & illegally). With the world shut down, Nike was able to control the market. Once the world opened back up, & financial struggles started hitting the economy, Nike’s plan to sacrifice its shelf space for digital space backfired as smaller brands, & even forgotten established brands took up that commodity.
Ppl saw other brands & liked them, leaving Nike w/ excess inventory. It also doesn’t help that most of their major markets r now isolated due to tariffs, hemorrhaging sale opportunities.
So yes, their stock is being hammered, but their per capita is still that of all the major brands, combined.
It’s funny b/c no one talks about Adidas stock plummeting. They peaked also during Covid in 2021, as well, at $176/share; yet, now they are at $86 today on the NYSE. No one is talking about OnCloud stock dropping from $51/share to now $27.
As I’ve said many times, it’s only big new w Nike b/c it’s Nike. We’re in a bad economy, but as long as Nike’s revenue is dwarfing its competitors, combined, which it currently is the evaluations will eventually correct itself by the 2028 fiscal yr.
Their main focus is back to athletics, which is y they r aggressively signing NIL athletes. The inventory should be completed by the beginning of 2027, price points aligned. They’ll most likely have the sneaker of the year this yr, & their running division (Nike’s original baby) is continuing to ascend.
