1. NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Holders: 75
Nike, Inc. (NYSE:NKE) designs, markets, and distributes luxury athletic footwear, accessories, equipment, and services for sports and fitness activities. The company also designs products specifically for the Converse and Jordan brands. Several of its products are valued at thousands of dollars.
Nike, Inc. (NYSE:NKE) reported a decline of 8% in its revenues on a reported basis and a 9% decline on a currency-neutral basis in fiscal Q2 2025. The company anticipates a slowdown in sales for the next few quarters as it repairs its operations. The company is focusing on scaling back on inventory to build a premium brand and steer clear of markdowns. This strategy is expected to bring Nike, Inc. (NYSE:NKE) back into the game and aid its recovery.
The bull case for the stock is also strong due to the continued growth of the sports industry, with athletes signing million-dollar deals and sports broadcasting booming. According to data from Euromonitor, Nike, Inc. (NYSE:NKE) holds 16.4% of the global sportswear market, with Adidas taking the second place at 9%. This reflects Nike, Inc.’s (NYSE:NKE) strong presence in this growing industry.
The company also saw momentum with positive physical and digital traffic in fiscal Q2 2025. Black Friday week proved to be the largest demand week ever on NIKE Digital, with sales increasing by double-digits. Similarly, 11/11 sales exceeded company plans in Greater China. Fiscal Q2 2025 thus reflected progress in key areas, with the company gaining consumer support.
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 top 12 luxury clothing stocks to buy according to hedge funds. While we acknowledge the potential of luxury clothing stocks, our conviction lies in the belief that 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 NKE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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