We recently compiled a list of the 11 Best Stocks to Buy in Falling Markets Now. In this article, we are going to take a look at where NIKE, Inc. (NYSE:NKE) stands against the other stocks.
Even though the year 2024 was not kind to certain sectors within the US economy, the broader outlook for the stock market heading into the new year was more than rosy. Investment banks generally anticipated moderate economic growth for the US in 2025. For example, Deutsche Bank forecasts a growth rate of approximately 2%, noting that 2025 will not be a year of rapid GDP growth. Meanwhile, JP Morgan’s Global Investment Strategy team emphasized a foundation of strength stemming from 2024’s robust market returns. They highlighted themes such as easing global policies and rising capital investment as key drivers for the coming year. Their report, Outlook 2025: Building on Strength, suggested that the US economy was well-positioned to capitalize on these favorable conditions.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
However, inflation remained a focal point in economic discussions. Top economic experts project that inflation rates will decelerate in 2025, approaching the Federal Reserve’s 2% target by the second half of the year. This outlook suggests a stabilization of price levels, which could influence monetary policy decisions. US Bank Chief Economist Beth Ann Bovino offered insights into the Federal Reserve’s anticipated actions. She predicted that the Fed would implement two interest rate cuts in 2025, citing continued economic strength. Bovino also noted that proposed tariffs and tax cuts by the new administration could exert additional inflationary pressures, potentially complicating the Fed’s policy decisions.
The fiscal policies of the new administration are expected to play a significant role in shaping the economic landscape. Bank of America analysts Claudio Irigoyen and Aditya Bhave discussed the interplay between US policy changes and the global economy. They anticipated that fiscal policy would be expansionary through tax cuts and acknowledged that proposed tariff increases could have a modest impact on consumer price inflation. Their analysis underscored the importance of balancing growth initiatives with inflation control. In terms of sector performance, Standard Chartered Bank expressed optimism about equities and commodities. Entering 2025, the bank was overweight in equities and gold, citing a resilient global economy with a projected GDP growth of 3%.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
To make our list of the best stocks in falling markets, we first made a list of stocks that have lost 15% or more over the past 12 months and are in the telecommunications, technology, or software infrastructure industries. Then, we picked the stocks that had the highest number of hedge fund investors in Q3 2024 courtesy of Insider Monkey’s database of hedge funds. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A team of trainers and athletes displaying a wide range of athletic and casual footwear.
NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Holders: 75
Decline in Share Price Over Past 12 Months: 26.8%
NIKE, Inc. (NYSE:NKE) markets athletic footwear and apparel. The following elements demonstrate why this company is an excellent investment choice. Firstly, as per the report for the fourth quarter of 2024, wholesale revenues were $7.1 billion, increasing 5% on a reported basis and 8% on a currency-neutral basis, indicating a strong operational performance. Also, the gross margin for the fourth quarter increased 110 basis points to 44.7%, reflecting the company’s efficiency in managing costs, leading to a higher profitability ratio for each dollar of revenue. Moreover, Nike’s strategic use of AI and Gen AI has dramatically improved the consumer experience, optimised the supply chain, and fueled product innovation. For instance, the company has developed its own generative AI model to design products using exclusive athlete data.
Overall NKE ranks 3rd on our list of the stocks to buy in falling markets now. While we acknowledge the potential of NKE as an investment, our conviction lies in the belief that some stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a 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.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
