NIKE, Inc. (NKE): A Bull Case Theory

We came across a bullish thesis on NIKE, Inc. on Saadiyat Capital’s Substack by Musa Iftikhar. In this article, we will summarize the bulls’ thesis on NKE. NIKE, Inc.'s share was trading at $71.22 as of September 24th. NKE’s trailing and forward P/E were 32.97 and 41.67 respectively according to Yahoo Finance.

Nike’s FY2025 results highlight a convergence of macro pressures, competitive challenges, and internal missteps that led to its first annual revenue decline in years, falling 10% to $46.3 billion, with net income down 44% to $3.2 billion. Footwear, the company’s largest segment, saw a 12% drop as excess inventory and product fatigue forced heavy discounting, while core classics and newer launches failed to fully offset declines.

Competitors like Adidas and Lululemon gained share, with niche players Hoka and On capturing consumer enthusiasm through innovation and community engagement. Apparel and equipment segments fared better, with apparel down only 6% and equipment up 6%, reflecting resiliency in casual athleisure, women’s fitness wear, and performance accessories.

Regionally, North America experienced a necessary reset due to oversupply and consumer pullback, while Greater China suffered a sharper 13% decline amid weaker demand, local competition, and slower product launches. EMEA revenue fell 10%, driven by inflation, cautious consumers, and Adidas’ resurgence, though emerging markets like the Middle East and Africa offered modest growth.

In response, Nike implemented a comprehensive “Win Now” turnaround under new CEO Elliott Hill, focusing on leadership realignment, cost reductions, inventory normalization, and a renewed “sport offense” strategy prioritizing core sports categories, product innovation, and cultural relevance. Nike is also recalibrating its channel mix, balancing direct-to-consumer and wholesale, while mitigating supply chain and tariff risks.

Early indicators suggest stabilization, including improved North American sell-through, a cleaner inventory base, and growing digital traction in China. With a strong balance sheet, continued shareholder returns, and a renewed strategic focus, Nike’s FY2025 appears to be a trough, setting the stage for potential revenue recovery, margin improvement, and restored brand momentum across its global portfolio, with execution in the coming quarters key to reclaiming leadership in the competitive athletic apparel and footwear industry.

Previously we covered a bullish thesis on NIKE, Inc. (NKE) by Any_Chocolate6194 in May 2025, which highlighted Nike’s strong brand, leadership return with Elliott Hill, and attractive valuation amid market caution. The company's stock price has appreciated approximately by 14.7% since our coverage. The thesis still stands as Nike’s global presence remains strong. Musa Iftikhar shares a similar perspective but emphasizes FY2025 challenges and the “Win Now” turnaround.

NIKE, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 81 hedge fund portfolios held NKE at the end of the second quarter which was 81 in the previous quarter. While we acknowledge the potential of NKE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HGTY and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.