Is Nike's Turnaround a Buy Signal? A Strategic Comparison to AI and Energy Infrastructure Giants

Nike, Inc. (NKE) has long been a bellwether for consumer discretionary stocks, but its 2025 earnings report painted a stark picture of a brand in transition. With revenues declining 10% year-over-year to $46.3 billion and net income plummeting 44%, the company's “Win Now” strategy—focused on inventory rationalization, product innovation, and reinvigorating core markets—has drawn both skepticism and cautious optimism. Yet, as Wall Street turns its gaze to high-conviction AI and energy infrastructure plays like IREN, Nebius, and CoreWeave, the question arises: Can Nike's recovery trajectory compete with the explosive growth of these tech-driven sectors?

Nike's Painful Reset: A “Win Now” Strategy in Action

Nike's 2025 performance was a mix of pain and progress. The company slashed inventory by $2.4 billion, a move that slashed gross margins but signaled a commitment to cleaning up its supply chain. CEO Elliott Hill's “sport offense” strategy—prioritizing key sports like running and basketball, and reengaging with athletes—has begun to bear fruit. The Vomero 18, for instance, became a $100 million franchise in just 90 days, showcasing Nike's ability to innovate under pressure.

However, Nike's path to recovery is mired in challenges. Tariff costs, a $1 billion hit in 2026, and a saturated market with rivals like Lululemon and On Cloud Shoes loom large. Shareholder returns remain a priority, with $5.3 billion returned in fiscal 2025, but the company's operating margin of 5.3% in 2026 pales against the 62% adjusted EBITDA margin of CoreWeave, a high-conviction AI infrastructure play.

AI and Energy Infrastructure: The New “Win Now”

In contrast, companies like CoreWeave (NASDAQ: CRWV) and IREN (NASDAQ: IREN) are rewriting the rules of growth. CoreWeave, a GPU-powered cloud infrastructure provider, reported a 206.9% revenue surge in Q2 2025, driven by $11.9 billion in AI contracts with OpenAI and NVIDIA. Its adjusted EBITDA margin of 62% dwarfs Nike's 5.3%, even as it burns cash ($290 million net loss in Q2). IREN, a clean-energy data center operator, leveraged renewable energy to power AI workloads, gaining 67% in 2025 as demand for sustainable infrastructure spiked.

These companies thrive on a different playbook: scale, speed, and sectoral tailwinds. CoreWeave's 3.2TB/s InfiniBand connectivity and IREN's zero-emission data centers position them as critical nodes in the AI revolution. Meanwhile, Nike's focus on “sport” feels increasingly niche in a world where AI infrastructure is the new gold rush.

A Tale of Two Turnarounds

The key difference lies in growth dynamics. Nike's recovery is a defensive maneuver—stabilizing a mature brand in a saturated market—while AI/energy plays are offensive bets on a nascent, high-margin sector. Nike's 31% global athletic footwear market share is a fortress, but it's also a liability in a world where margins are eroding. CoreWeave's 206.9% revenue growth, by contrast, reflects the explosive demand for AI compute power, a market projected to grow at 35% annually through 2030.

Yet, Nike's brand equity and $9.2 billion cash hoard offer a unique advantage. Its recent partnership with Amazon and WNBA star A'ja Wilson hints at a reinvigoration of its direct-to-consumer strategy. If Nike can rekindle its innovation engine—think the Air Jordan 1 or the original Cortez—it could recapture its 2010s-era dominance. The question is whether its “sport offense” can outpace the AI sector's relentless momentum.

Investment Implications: Buy, Wait, or Bet on the Future?

For long-term investors, Nike's valuation is compelling. At a P/E of 12x and a P/B of 2.5x, it trades at a discount to its historical averages. JPMorgan's recent upgrade to “Overweight” with a $93 price target (a 22% upside) suggests confidence in its turnaround. However, the company's path to 10% operating margins by 2028 hinges on inventory discipline and margin recovery—both high-risk propositions in a weak consumer environment.

In contrast, CoreWeave and IREN offer higher growth but with elevated risk. CoreWeave's $290 million net loss in Q2 2025 and IREN's reliance on renewable energy subsidies make them speculative plays. Yet, their roles in powering the AI revolution—where demand is outpacing supply—justify their premium valuations.

Conclusion: A Buy for the Patient, a Gamble for the Bold

Nike's recovery is a marathon, not a sprint. While its “Win Now” strategy has stabilized the ship, the company's growth potential is capped by market saturation and margin pressures. For investors seeking a long-term buy, Nike's brand strength, cash reserves, and strategic clarity make it a defensive play in a volatile market.

However, those with a higher risk appetite should consider AI/energy infrastructure. CoreWeave's 206.9% revenue growth and IREN's 67% stock surge in 2025 highlight the sector's explosive potential. While these companies lack Nike's brand moat, they are building the infrastructure for the next decade of technological progress.

In the end, the choice between Nike and AI/energy plays depends on your risk tolerance and time horizon. Nike offers a cautious path to stabilization; the AI sector promises a high-stakes ride. For a diversified portfolio, both have a place—but the future belongs to those who bet on the next frontier.