Sergio Delle Vedove/iStock Editorial via Getty Images Introduction and Investment Thesis Since I last covered Nike ( NKE ) in June 2025 with a “buy” rating, the stock is roughly 9% underperforming the S&P 500’s 15.5% gain during this period of time. Meanwhile, on a YTD basis, Nike is slightly lagging the S&P 500, while competitors like Deckers Outdoor (NYSE: DECK ) and Onto (NYSE: ONTO ) are outpe...
Sergio Delle Vedove/iStock Editorial via Getty Images Introduction and Investment Thesis Since I last covered Nike ( NKE ) in June 2025 with a “buy” rating, the stock is roughly 9% underperforming the S&P 500’s 15.5% gain during this period of time. Meanwhile, on a YTD basis, Nike is slightly lagging the S&P 500, while competitors like Deckers Outdoor (NYSE: DECK ) and Onto (NYSE: ONTO ) are outperforming the stock, as can be seen below. SA: YTD Performance of Nike relative to the S&P 500, DECK and ONTO In Q2 FY26 earnings , Nike management claimed that they are in the middle innings of their comeback, beating both revenue and earnings growth estimates during the quarter. During the earnings call , management outlined their progress on the “Win Now” strategy, where inventory declined for the fourth straight quarter as they have been rightsizing their Classics franchise and diversifying their portfolio across new innovation areas. Meanwhile, Nike’s Wholesale business continued to accelerate, while Nike Direct revenues contracted from weakness in Nike Digital as management curbed down on the number of promotional days, leading to lower sales volume. Finally, management also noted the divergence in business performance across their North America and China markets, where the former is accelerating, while the latter is showing growing weakness. While consensus estimates point to a nearby inflection point in Nike’s business from Q4 onwards, the latest episode of tariff drama has complicated the outlook. Meanwhile, the trend of downward revisions by analysts to forward growth estimates over a three-month period is somewhat concerning as well. Finally, the big unknown at this point is whether Nike can successfully revive growth back in their Greater China market. At the moment, I will stay on the sidelines and rate the stock a "hold," given the uncertainty the company faces, which can lead to further downward revisions in growth prospects ahead. Inventory Drawdown for Four ...
A 20% slide in Baidu Inc. ’s shares over the past month serves as a crucial reminder for companies in China’s rapidly intensifying artificial intelligence race: investors are demanding tangible results. The search engine specialist kicks off December-quarter earnings for China’s Big Tech on Thursday, amid growing concern that its AI investments are not translating into a meaningful growth driver q...
A 20% slide in Baidu Inc. ’s shares over the past month serves as a crucial reminder for companies in China’s rapidly intensifying artificial intelligence race: investors are demanding tangible results. The search engine specialist kicks off December-quarter earnings for China’s Big Tech on Thursday, amid growing concern that its AI investments are not translating into a meaningful growth driver quickly enough. Despite strength in the cloud business, analysts predict both revenue and profit to fall year on year, hurt by continued weakness in the core advertising business that’s closely tied to the broader economy. With markets fixated on AI, positive management commentary or evidence that capital spending is bearing fruit will be crucial to help stem an equity rout that’s eroded $11 billion in market value since a three-year high on Jan. 23. “In the crowded field of Chinese AI players, Baidu is viewed more as an optionality or valuation‑driven sum‑of‑the-parts story rather than a clearly defined long‑term winner,” said Gary Tan , portfolio manager at Allspring Global Investments LLC. “Baidu must demonstrate it is leveraging its AI capabilities to build a true full stack AI platform rather than acting as a jack of all trades.” Baidu was among the first Chinese companies to embrace AI and roll out a ChatGPT-like service, but it has lost leadership in the field to larger rivals as well as newcomers like DeepSeek. The Beijing-based firm’s flagship mobile application has also seen popularity wane, with young users flocking to social apps from rivals ByteDance and Xiaohongshu for search queries. The stock has suffered also on account of a wave of new listings by pure‑play AI firms such as chip designers and large language model developers. The outsized gains in shares of companies like MiniMax Group Inc. and Knowledge Atlas Technology JSC Ltd. — better known as Zhipu — are luring investors away from diversified internet conglomerates such as Baidu, Alibaba Group Holding L...
The search engine specialist kicks off December-quarter earnings for China’s Big Tech on Thursday, amid growing concern that its AI investments are not translating into a meaningful growth driver quickly enough. “In the crowded field of Chinese AI players, Baidu is viewed more as an optionality or valuation‑driven sum‑of‑the-parts story rather than a clearly defined long‑term winner,” said Gary Ta...
The search engine specialist kicks off December-quarter earnings for China’s Big Tech on Thursday, amid growing concern that its AI investments are not translating into a meaningful growth driver quickly enough. “In the crowded field of Chinese AI players, Baidu is viewed more as an optionality or valuation‑driven sum‑of‑the-parts story rather than a clearly defined long‑term winner,” said Gary Tan, portfolio manager at Allspring Global Investments LLC. “Baidu must demonstrate it is leveraging its AI capabilities to build a true full stack AI platform rather than acting as a jack of all trades.” Baidu was among the first Chinese companies to embrace AI and roll out a ChatGPT-like service, but it has lost leadership in the field to larger rivals as well as newcomers like DeepSeek.