Is NKE a good stock to buy? We came across a bullish thesis on NIKE, Inc. on Deep Research Global’s Substack. In this article, we will summarize the bulls’ thesis on NKE. NIKE, Inc.’s share was trading at $44.94 as of May 26th. NKE’s trailing and forward P/E were 29.57 and 23.15 respectively according to Yahoo Finance.
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NIKE, Inc., together with its subsidiaries, designs, develops, markets, and sells athletic and casual footwear, apparel, equipment, accessories, and services for men, women, and kids in North America and internationally. NKE is undergoing a critical operational and brand reset under returning CEO Elliott Hill, with investors increasingly focused on the company’s long-term earnings recovery rather than near-term volatility caused by tariffs and China weakness. Despite fiscal Q3 2026 revenue remaining flat year-over-year at $11.3 billion and diluted EPS declining 35% to $0.35, the quarter showed early signs that Nike’s turnaround strategy is beginning to stabilize the business.
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North America wholesale revenue continued to recover, the running category gained momentum, and management deliberately shifted the company back toward healthier wholesale relationships after years of overreliance on direct-to-consumer distribution. Nike’s “Win Now” and “Sport Offense” initiatives are repositioning the company around core sports categories including running, basketball, football, and training, while product innovation and brand marketing remain anchored by elite partnerships across the NFL, NBA, and global athletics.
The largest near-term overhang remains tariffs, with management estimating a $1.5 billion gross cost impact in fiscal 2026 and a 315-basis-point drag on Q4 gross margin, although investors view these pressures as temporary rather than structural. Greater China also remains challenged as Nike resets inventory and attempts to regain share from local competitors, but management continues to view the region as a major long-term growth opportunity.
Importantly, Nike still generated enough cash flow to return $609 million through dividends in Q3 alone and extended its dividend increase streak to 24 consecutive years. With the stock trading near multi-year lows, investors are effectively underwriting a recovery in margins, China normalization, and brand momentum, which could drive substantial upside if earnings power rebounds over the next several years.
Previously, we covered a bullish thesis on NIKE, Inc. by Any_Chocolate6194 in May 2025, which highlighted Nike’s brand strength, leadership reset under Elliott Hill, and improving wholesale relationships despite tariff concerns. NKE’s stock price has depreciated by approximately 27.61% since our coverage. Deep Research Global shares a similar view but emphasizes on Nike’s operational turnaround, margin recovery, and long-term earnings normalization.
NIKE, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 71 hedge fund portfolios held NKE at the end of the first quarter which was 82 in the previous quarter. While we acknowledge the risk and 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 NKE and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
