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Nike stock has been crushed from its highs, and for good reason.

The company has lost market share to competitors such as Hoka and On, struggled badly in China, damaged important wholesale relationships, and spent years pursuing a direct-to-consumer strategy that ultimately failed to deliver the growth investors expected.

But investing is not about identifying what went wrong after everybody already knows it.

The more important question is this:

Is Nike still deteriorating—or is the business beginning to turn just as investor sentiment reaches its most bearish point?

That distinction is why NKE is finally getting my attention.

How Nike Got Here

Nike did not arrive at its current problems overnight.

For years, the company enjoyed one of the strongest brands in the world. Nike commanded premium pricing, dominated athletic footwear, had enormous influence with retailers, and possessed a direct relationship with athletes that competitors struggled to replicate.

Over time, however, several strategic decisions began changing the company.

One of the earliest changes involved Nike becoming increasingly willing to insert the brand into controversial cultural and political issues.

The Kaepernick Era

In 2018, Nike made Colin Kaepernick the face of its 30th anniversary “Just Do It” campaign.

The announcement generated immediate controversy and calls for a boycott. Nike shares initially fell as investors tried to determine whether the campaign would alienate customers.

Importantly, the Kaepernick campaign did not destroy Nike financially.

Nike’s business continued growing, and the stock ultimately moved substantially higher in the years that followed.

That matters because it would be inaccurate to simply argue that Nike embraced controversial cultural issues and the stock immediately collapsed.

It didn’t.

But the campaign did establish something important about Nike’s strategy: management was increasingly willing to position the company as more than a sports brand.

The Betsy Ross Controversy

That became even clearer in 2019 when Nike pulled a planned sneaker featuring the Betsy Ross flag after Kaepernick reportedly raised concerns about the symbolism.

Again, Nike shares did not collapse because of this decision.

But Nike was continuing to associate its brand with cultural debates that had little to do with whether it could make the best running shoe, basketball shoe, or athletic apparel.

Then the broader environment changed.

Corporate Activism Becomes a Much Bigger Issue

Following 2020, major corporations increasingly became involved in social and political issues.

Gillette faced backlash over its advertising.

Disney became embroiled in a major political battle with Florida.

Bud Light later experienced an extraordinarily visible consumer backlash.

Nike had arguably front-run this trend years earlier.

Can we prove that Nike’s cultural positioning caused its later financial problems?

No.

And I would not make that claim.

What we can measure much more easily is what happened inside Nike’s actual business.

And that’s where the real problems begin.

Nike’s Operational Problems Become Impossible to Ignore

By late 2023, Nike was cutting its sales outlook and announcing approximately $2 billion in cost savings.

Now the problem was no longer theoretical.

Demand was weakening.

Promotions were increasing.

Digital growth was slowing.

And Nike was losing ground in categories where it had historically dominated.

Then came June 2024.

The 2024 Nike Stock Collapse

Nike issued a gloomy sales forecast and the stock suffered one of the worst single-day declines in company history.

That was a major change in Wall Street’s perception of the company.

Nike was no longer being viewed simply as a great business experiencing a temporary slowdown.

Investors began asking whether something had structurally changed.

And one of the biggest issues was competition.

Hoka and On Found the Opening

Hoka and On did something Nike should never have allowed them to do:

They became highly relevant with serious runners.

At the same time, Nike’s product lineup became increasingly dependent on established franchises while competitors brought fresh designs, new cushioning technologies, and greater excitement into specialty running stores.

But Nike’s problems went beyond product innovation.

Management had also weakened one of the company’s greatest competitive advantages.

Distribution.

Nike’s Direct-to-Consumer Strategy Backfired

Under former CEO John Donahoe, Nike aggressively pursued a direct-to-consumer strategy.

On paper, the logic made sense.

Why sell through another retailer and share the economics when Nike could sell directly through its own stores, website, and apps?

Higher direct sales could theoretically mean:

• Better margins
• More customer data
• Greater control over pricing
• Stronger customer relationships

There was only one problem.

Retail shelf space doesn’t remain empty.

As Nike reduced its dependence on traditional retailers, those retailers needed other products to sell.

Hoka moved in.

On moved in.

Other competitors gained visibility.

In an effort to control more of the customer relationship, Nike inadvertently helped competitors establish relationships with customers Nike once took for granted.

That may prove to be one of the most consequential strategic mistakes of the Donahoe era.

Elliott Hill Returns to Nike

In September 2024, Nike announced that longtime company veteran Elliott Hill would return to become CEO, replacing John Donahoe.

That is where the story begins to change.

Hill inherited a mess:

• Weakening growth
• Damaged wholesale relationships
• Increased competition
• China problems
• Product stagnation
• Falling investor confidence

But instead of doubling down on the previous strategy, Nike began changing direction.

The company has been rebuilding relationships with retailers and specialty running stores while renewing its focus on sport, product innovation, and athlete performance.

That is much closer to the Nike investors historically paid a premium to own.

New Products May Be the Most Important Bullish Signal

CEO changes generate headlines.

Shoes generate revenue.

That’s why I care much more about what Nike is producing than what management says during an investor presentation.

Products such as the Vomero, Pegasus, and Structure lines represent Nike’s attempt to regain credibility in running and compete directly with brands such as Hoka and On.

This is critical.

Nike does not need Hoka to disappear.

Nike does not need On to fail.

Nike simply needs to stop surrendering market share and begin producing products consumers genuinely want again.

There are early signs that running is improving.

That matters more to me than corporate slogans.

Nike’s Turnaround Begins Showing Up in the Numbers

By late 2025, headlines began changing.

Instead of exclusively discussing Nike’s decline, investors began seeing evidence that the turnaround was gaining traction.

Wholesale improved.

Running strengthened.

Product orders improved.

Management’s strategy was beginning to show signs of moving beyond promises.

That does not mean the turnaround is complete.

Far from it.

China remains one of Nike’s most significant problems.

Competition remains intense.

Margins still require work.

But contrarian opportunities rarely appear when every part of the business looks wonderful.

By that point, the stock is usually much more expensive.

The $986 Million Nike Earnings Controversy

One of the more recent bearish arguments surrounding Nike involves approximately $986 million in tariff recoveries recognized by the company.

This deserves attention because the benefit had an enormous impact on reported profitability.

Nike reported quarterly earnings of approximately $0.72 per share, with roughly $0.52 per share associated with the tariff recovery.

That means investors should be very careful when comparing the headline earnings number with normalized operating performance.

However, there is an important distinction.

Nike did not simply book the tariff recovery as revenue.

The benefit was recognized through Cost of Sales, reducing reported costs and increasing gross profit.

So the accounting itself is not the investment thesis.

The real issue is this:

How profitable is Nike’s underlying business once we strip away unusual items?

That’s the question investors should be asking.

Management Turnover Is a Risk Worth Watching

Nike’s executive ranks have also undergone significant change.

Elliott Hill replaced John Donahoe as CEO.

The CFO position transitioned to David Denton.

Nike’s accounting leadership has also experienced turnover.

None of that proves there is an accounting problem.

But when a company is simultaneously:

• Replacing senior executives
• Reversing strategy
• Repairing distribution
• Rebuilding products
• Managing tariff issues
• Struggling in China

…I want to pay attention.

A turnaround of this size carries execution risk.

Yet Wall Street Remains Extremely Bearish

This is where Nike becomes interesting to me as a contrarian investor.

Short sellers have increased pressure on the stock.

The company’s failures are widely discussed.

China is widely recognized as a problem.

Everyone knows Hoka and On have taken share.

Everyone knows the DTC strategy failed.

Everyone knows Nike’s margins are weaker.

At some point, the question stops being:

“What’s wrong with Nike?”

And becomes:

“Who doesn’t already know?”

Markets frequently begin bottoming before the underlying news becomes good.

That’s because markets discount the future.

The best contrarian opportunities often appear when the existing problems are obvious but the rate of deterioration is beginning to slow.

One Headline Recently Caught My Attention

A particularly interesting development came when Nike shares gained even as China remained weak.

That is something traders should pay attention to.

When bad news repeatedly sends a stock lower, the market is telling you sellers remain in control.

When the same type of bad news stops producing new lows, something may be changing beneath the surface.

It doesn’t prove the bottom is in.

But it tells me to start watching much more closely.

The Bull Case for Nike Stock

The bullish thesis is not that everything has suddenly been fixed.

It is that several important variables are changing simultaneously.

Nike now has:

• A new CEO
• New financial leadership
• A renewed focus on sport
• Improving wholesale relationships
• New running products
• Improving performance in key athletic categories
• Extremely depressed investor expectations
• A heavily damaged share price

Nike does not need to immediately return to its former glory.

It simply needs the rate of deterioration to stop.

If revenue stabilizes, running improves, wholesale recovers, margins begin normalizing, and management demonstrates that the new product strategy is working, the market may eventually be forced to reconsider the valuation it assigns to NKE.

The Bear Case Is Still Very Real

There are plenty of reasons Nike could continue struggling.

China remains weak.

Hoka and On aren’t going away.

Adidas remains formidable.

Chinese athletic brands are becoming increasingly competitive in their home market.

Nike’s underlying margins still need improvement.

And management has not yet proven that this turnaround can produce sustainable earnings growth.

This is not a clean turnaround.

But if it were clean, the stock likely wouldn’t be trading where it is.

Nike Technical Analysis: Why I’m Becoming Interested

This is where fundamentals meet price.

I did not own Nike throughout the majority of this decline because the technical structure gave me no reason to fight the trend.

Support levels continued breaking.

Lower highs continued forming.

Momentum remained bearish.

Trying to identify the exact bottom would have meant attempting to catch a falling knife.

TrendSpider helped me avoid doing that.

But technical analysis isn’t only useful for telling us when to stay away.

Its greatest value often comes when a stock begins transitioning from:

Avoid → Watch → Accumulate

That’s the stage I am beginning to investigate with Nike.

I am watching longer-term support, momentum, volume, potential bullish divergences, failed breakdowns, and evidence that sellers may finally be exhausting themselves.

I don’t need to predict the exact low.

I need the market to begin confirming that the risk/reward has shifted.

I’m Not Buying Nike All at Once

If I ultimately decide that Nike deserves a full position, my strategy is not to buy everything on one day.

I prefer to build positions over time.

That might mean establishing an initial tranche near an attractive risk/reward level and then adding as the market confirms the thesis.

If Nike successfully retests support, I may add.

If the stock reclaims important resistance, I may add.

If we get another controlled liquidity flush into support while the thesis remains intact, that may provide another opportunity.

And if the market proves the thesis wrong, I stop adding and manage the risk.

The objective is simple:

Make Nike earn my capital.

Is Nike Stock Finally a Buy?

So am I bullish on Nike?

I’m becoming bullish.

There’s an important difference.

I’m not arguing that every problem has been solved.

I’m not arguing that Nike is returning to all-time highs tomorrow.

And I’m certainly not interested in backing up the truck based on one quarterly report.

What interests me is the combination of:

terrible sentiment + a destroyed stock price + changing management + improving products + recovering distribution + the possibility of changing technical behavior.

That’s the type of setup that gets my attention.

I don’t need Nike to become perfect.

I need the rate of deterioration to stop while expectations remain terrible.

And if the technical picture continues confirming the fundamental turnaround, I may begin building the position.

Follow the Nike Trade as It Develops

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Disclosure: This analysis is for educational purposes and should not be considered individualized financial advice.