I am buying Nike Stock!
Despite Nike’s current slump and the deserved hit its stock has taken, the growth potential is significant. Many of the issues are fixable, and with Nike’s robust financial and brand muscle, it can weather these storms, even a potential recession, as it did in 2008. Nike’s infrastructure and ecosystem have been stress-tested for decades, a testament to its resilience.
You won’t find it here if you’re seeking a deep security analysis of Nike Stock with a sophisticated review of Nike’s business. But that’s not a cause for concern. Nike is a simple business, and my investment thesis is relatively straightforward.
I am bullish on Nike because Caitlin Clark has the potential to propel it into a new hyper-growth phase, similar to the impact we saw with Michael Jordan in the 1980s and 1990s. This growth potential seems evident (the right time and place) for a magical story to unfold.
When Wall Street talks about Nike, it seems rather blah. Where is the creativity or outside-the-box thinking? Almost everyone analyzing this company is talking about the wrong thing. Nike can be summed up simply through a Steve Jobs quote:
“The best example of all, and one of the greatest jobs of marketing the universe has ever seen is Nike,” Jobs explained. “Remember, Nike sells a commodity. They sell shoes. And yet when you think of Nike, you feel something different than a shoe company. In their ads, they don’t ever talk about their products. They don’t ever tell you about their air soles and why they’re better than Reebok’s air soles. What does Nike do? They honor great athletes and they honor great athletics. That’s who they are, that’s what they are about.”
It’s not about the shoes; it’s about the people wearing the shoes!
It’s that simple.
A shoe is just a shoe. Proprietary shoe technology doesn’t move merchandise. Nike is an aspirational lifestyle brand. No other company in the world does a better job selling and promoting great athletes. They have an invisible superpower in their brand value, an intangible asset that drives a high level of engagement in selling apparel, shoes, and merchandise.
Nike isn’t the company it is today without Michael Jordan, who signed a five-year, $2.5 million deal in October 1984.
The contract was an absurd overpay for a basketball player at the time. Yet, now it looks like a slam dunk for Nike because Jordan transcended basketball and became a global cultural phenomenon.
The NBA and Nike didn’t elevate Jordan; it’s the opposite. The Jordan brand elevated basketball and sneakers to new heights. His sponsorship with Nike turned into a billion+ industry.
Nearly 30 years after Jordan signed with Nike, Clark signed an eight-year deal worth $28 million. This deal is bafflingly low for what could be a future brand worth $1-5 Billion.
Nike stock appreciated over 1,000% from when they signed Jordan to when he retired for the first time in 1993. It gained another 100% from when he returned in 1995 to when he retired for good in 2003.
In the story unfolding with Caitlin Clark today, we are witnessing the early stages of another cultural phenomenon that undeniably impacts culture.
How Clark can elevate Nike:
The Clark Effect:
A name that is trending up: Clark transcends sports. Very few athletes trend like this with long-term staying power. We already see this in the WNBA, a sport with an extremely niche following pre-Clark. The fanbase was small, with fans not spending “big” money on the product. That is changing.
Clark is now part of daily sports talk shows and debates. The more people talk about it, the longer it remains relevant and stays in the mainstream discussion.
Record WNBA attendance and viewership:
When the Indiana Fever played the Los Angeles Sparks, 19,103 fans attended Crypto.com Arena. That was more than the largest home game crowd for the Los Angeles Lakers, and LeBron James drew 18,997.
The cost of Indiana Fever tickets has doubled and, in some marquee matchups, nearly tripled compared to last year!
WNBA games are averaging 1.32 million viewers, almost tripling last season’s average of 462,000.
The WNBA has expanded, adding two new teams: the Golden State Valkyries in 2025 and a Toronto team in 2026. More stars will join the WNBA in the next four years – Paige Bueckers, Juju Watkins, Hannah Hidalgo, etc.- which will increase viewership and the league’s star power.
Fourth most famous athlete in America already!
She is only trailing LeBron James, Stephen Curry, and Tiger Woods. Clark could quickly ascend to #1 in the next 3-5 years as the most famous athlete today, just entering her physical peak. The top three athletes in this list are nearing the tail end of their respective careers.
She’s a superstar:
We have seen hyped-up college athletes like JJ Redick and Jimmer Fredette before. We have witnessed Linsanity in the NBA and Tebow Mania in the NFL. None of these players were superstar athletes on the pro level, and their fandom eventually diminished.
No checkered past with a pristine record:
Clark seems similar to Jordan, a no-nonsense athlete intensely focused on basketball and obsessed with winning. No demons or scandals that diminished or brought down other athletes – Kobe Bryant, Johnny Manziel, and Michael Vick come to mind.
I don’t see Clark posting dances on TikTok or starting her podcast. She’s not an activist who is getting involved in politics. Eat, Sleep, Breathe, and play basketball. There are no distractions.
A new brand within a brand: Bigger than Air Jordan?
Clark already has a rabid, dedicated, and obsessive fanbase. Comparing Clark with LeBron James or Stephen Curry is the wrong comparison. Clark’s brand is more similar to that of Taylor Swift and Barack Obama.
Swift can make her fans spend over $1,000 on a non-premium seat ticket for a show and make them feel they are getting a reasonable deal.
Obama brought in millions of first-time voters to vote for him because (insert whatever reason you believe is correct) he propelled himself to a cultural phenomenon status.
A market largely untapped by Nike:
Nike’s women’s segmented business makes up just 22% of its sales.
Think of all the girls and women who want to buy Clark’s shoes. The market is largely untapped. Nike is seeing early success with Sabrina Ionescu and the Sabrina 1, a top ten WNBA player.
Clark’s brand could evolve beyond sneakers and boost Nike’s lifestyle segment into an entire product line of different types of shoes, socks, tracksuits, etc.
Identity with mass appeal:
Victor Wembanyama is a French basketball player and could be the best men’s basketball player in the next five years. He is also a Nike athlete, but I don’t see him coming close to bringing in what Clark does. “Wem-bany-am-a,” the name isn’t catchy or memorable. “Clark’s” is already a well-known popular shoe retailer in the UK. Besides the name, Clark is from the heartland and plays in the heartland.
I am not knocking Wembanyama or Ionescu as athletes, but like performers, style points matter in our culture. The top recording artists aren’t the top vocalists. Popularity and fandom are more a feeling than a rational thought. Competitive sports fall into a performance art category. What you won’t hear on CNBC or Bloomberg is the intrinsic relationship between Clark and her fans in the arena and online.
Get in while you can:
Wall Street will react once the shoe is released and the numbers are in an earnings report. I am getting in now. As we saw with Jordan, this feverish support can last for years, even decades. I see a noticeable halo effect for Nike, and this is like investing in Taylor Swift if she were a stock in 2010.
What I also love about this investment is that it isn’t binary. It could be a solid long-term investment rather than a trade.
Nike’s dividend (1.96%) is low, but given its financial health, it is well-covered by earnings and has increased over the past ten years. This trend should easily continue in the next ten years.
Nike trades at about 21x forward earnings. There is no expected earnings growth this year, so the stock is cheap (for a growth company) and reasonably priced, with low expectations.
Nike has a solid business that doesn’t need saving, but Clark could elevate the brand to a level that even Nike executives do not anticipate. A signature shoe deal was originally off the table during the initial negotiation, showing skepticism about the confidence that a shoe line by a female basketball player could drive sales. At this point, the skepticism doesn’t matter. It would be hard for Nike to mess things up and not capitalize on Clark’s meteoric rise in fame.
The biggest question is whether men will buy Clark shoes. I empathically believe yes. Hype and cultural shifts are not gender or even age-exclusive.
Take, for example, Donald Trump, who has said deplorable things against women. His actions against women have been equally disgraceful, yet he has millions of supporters who are women.
Taylor Swift’s fanbase is distributed uniformly across various ages. Almost half the people who attend her concerts are over 45, and her fanbase is almost evenly split 50-50 between males and females.
Humans are generally programmed to follow a herd. The more popular Clark becomes and achieves on the court, the more valuable her brand name becomes, making her a powerful force in selling merchandise to anyone worldwide, not just sneakerheads or young girls.
Even if Clark flops, this isn’t an all-or-nothing type of risk. The business is highly robust. Nike has missed trends and made mistakes in the past, but it always recovers because it excels at sales and marketing better than almost everyone else. If there is lightning in a bottle with Clark, Nike will know how to maximize sales. That’s what they do.
Invest in Myself 