Nike Sinks to a 13-Year Low While Tesla and Amazon Find Buyers

Dear readers,

Nike’s answer to the question we left open yesterday is in, and it isn’t kind. The broader question for Friday is where consumers and companies are still willing to spend. The jobs report supplies the sober backdrop: the U.S. economy added just 29,000 positions in September. Tesla, Amazon and Nike each give a different answer.

Nike: The Turnaround Will Take Longer Than Planned

Nike shares have fallen to their lowest level since 2013. They trade around €28.80, down almost 8 percent on the day. The stock is down 45 percent since the start of the year and 55 percent over twelve months.

The headline numbers weren’t the problem. Adjusted earnings per share came in at $0.48, ahead of the $0.43 to $0.44 analysts expected. Revenue of $11.21 billion missed slightly.

The guidance did the damage. For fiscal 2027, Nike expects revenue to fall by a high-single-digit percentage, against a consensus of roughly minus 2 percent. Adjusted earnings per share are projected at just $1.15 to $1.35, well below market expectations.

The cause is China, where currency-neutral revenue plunged 26 percent, the ninth consecutive quarterly decline. The region accounts for about 15 percent of group sales. North America grew 2 percent.

CEO Elliott Hill’s restructuring is meant to save roughly $2.5 billion by fiscal 2031. It will cost about $1 billion and bring further job cuts. Goldman Sachs cut its price target from $38 to $30 (Neutral), and Bank of America sits at $24 (Underperform). Jefferies remains the optimist at $60 (Buy). RBC expects drags from Jordan, Sportswear and China through fiscal 2028.

Anyone betting on a quick rebound is betting against most analysts. The savings mostly arrive in fiscal 2029 and 2030. Adidas is up about 1.3 percent, but it also has to absorb forecast cuts from Metzler and JPMorgan. For now, Nike demands patience, and the stock looks more like a wager on 2029 than on the next quarter.

Tesla and Rivian: The EV Market Splits in Two

Tesla delivered 486,532 vehicles in the third quarter, well above consensus estimates of roughly 457,000 to 463,000. Production of 464,391 units trailed deliveries, so inventories shrank. Europe carried the result: EU registrations are up 66 percent through August, while the U.S. and China remain weak.

The shares are up 1.6 percent at about €320 but remain 18 percent lower for the year. The next test comes on October 21, when Tesla is scheduled to report quarterly results after the U.S. close. Unit volumes won’t be enough; margins have to cooperate. JPMorgan recently lowered its target to $415 (Neutral).

Rivian reported a record 19,248 deliveries against expectations of 18,001, and it kept its full-year guidance of 65,000 to 70,000 vehicles. Quarterly results are due October 29. General Motors, by contrast, sold only 670,974 vehicles in the U.S. in the third quarter, 5.5 percent fewer than a year earlier, on weaker electric-vehicle and Cadillac sales.

Legacy automakers are suffering from the EV slowdown, while Tesla and Rivian are winning with new models and in Europe. The gap within the industry is widening.

Amazon: Outsourcing the AI Bill

Amazon trades around €223.50, up about 1.2 percent but still well below its August high. Three pieces of news sit behind the move, and they belong together.

Should investors sell immediately? Or is it worth buying Nike?

First, AWS announced a program of more than $1 billion over five years for communities that host data centers. AWS chief Matt Garman warned that more than 100 moratoria are under consideration across the U.S. Second, according to the Financial Times, Amazon plans a sale-and-leaseback of roughly $8 billion in Nvidia chips into a special-purpose vehicle.

The vehicle would take on debt and raise up to 10 percent equity from investors. Third, Goldman Sachs added Amazon to its Conviction List with a $375 price target, implying about 50 percent upside.

The logic is the capital plan. Amazon intends to invest around $220 billion in 2026, and the more of that flows into chips, the more attractive financing off the balance sheet becomes. Meanwhile, local resistance is slowing the buildout, the same concrete-and-steel layer we followed yesterday.

Bank of America puts the ten largest AI stocks at about 42 percent of U.S. market capitalization, a level on par with earlier bubbles. Amazon is part of that group, but AWS, advertising and retail give it several earnings engines.

That diversification is its edge over pure chip names. The risks are higher debt that could be tucked into the vehicle, and permitting fights on the ground.

The Jobs Report: Few Hires, Few Layoffs

The U.S. economy created only 29,000 jobs in September, against expectations of 84,000 to 90,000. July and August were revised down by a combined 60,000. The unemployment rate rose to 4.2 percent. Hourly wages rose just 3.0 percent from a year earlier, while inflation ran at 3.4 percent in August.

Real incomes are therefore shrinking. That fits Nike’s weakness and the automakers’ discounting. Yet layoffs are at their lowest in four years, and initial jobless claims remain near 57-year lows.

Wall Street opened sharply higher, because a further rate hike in October now looks unlikely. Swap markets treat a December hike as fully priced in. The report doesn’t signal recession. It describes a consumer who is counting every price.

The Calendar Delivers the Verdicts

The coming weeks supply the tests. On October 9, Moderna joins the Nasdaq-100, replacing Warner Bros. Discovery. The stock has gained more than 500 percent this year, so plenty is already priced in. Tesla follows on October 21 and Rivian on October 29.

The Takeaway

Spending hasn’t stopped, but it has become selective. For growing large caps outside the chip trade, Amazon offers the broadest foundation. At Tesla, margins will decide. At Nike, the burden of proof is on China not breaking away for good.

Have a great weekend.

Best regards,
The StocksToday.com Editorial