1. NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Holders: 75
Nike, Inc. (NYSE:NKE) is a globally popular designer, marketer, and distributor of athletic footwear, accessories, equipment, and services for sports and fitness activities. Its operating segments span EMEA, Greater China, APLA, and North America. The company also designs products specifically for the Converse and Jordan brands.
Nike, Inc. (NYSE:NKE) took a significant step in fiscal Q1 2025 by shifting its portfolio to create balance in its business. It has been intentionally reducing the business proportion driven by its classic footwear franchises, including Air Jordan 1, Air Force 1, and Dunk. Revenue from these franchises thus decreased in fiscal Q1 2025 as the company continued to tighten its marketplace supply. The company is actively rebalancing product allocations to its highest traffic channel to maximize full-price realization and franchise health.
However, Nike. Inc. (NYSE:NKE) also saw growth in multiple sports dimensions, reflecting its continued popularity. Its men’s fitness, men’s global football, and men’s and women’s running footwear led this growth. Two of the company’s largest performance franchises, Mercurial and Global Football and the G.T. series in basketball, also delivered double-digital growth. Nike. Inc. (NYSE:NKE) also launched one of its biggest Running brand investment campaigns in years, which is expected to carry into the holiday season. Initial estimates show strong consumer engagement for the campaign.
ClearBridge Large Cap Growth Strategy stated the following regarding NIKE, Inc. (NYSE:NKE) in its Q2 2024 investor letter:
“Other moves during the quarter included sales of United Parcel Service (UPS) and NIKE, Inc. (NYSE:NKE). Nike has become overly reliant on key platforms, like Jordan, for revenue growth while innovation in areas like running has lagged. Nike could face continued revenue and profit pressure as it invests to re-invigorate innovation and re-position the business back toward wholesale outlets. As such, we are seeking out better ways to participate in the global consumer recovery in companies where earnings estimates have already reset.”
Overall, NKE ranks first among the 10 best fitness and gym stocks to buy now. While we acknowledge the potential of fitness and gym stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NKE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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