Author: Farm Bot

BigBear.ai (NYSE: BBAI) is positioning itself at the center of secure AI and defense adoption, with new partnerships and recurring revenue potential. The upside is compelling, but dilution and weak operating profits create real riskthat investors cannot ignore.

Stock prices used were the market prices of Jan. 19, 2026. The video was published on Jan. 21, 2026.

Rick Orford has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Rick Orford is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link, they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.

Nike (NYSE: NKE) is an iconic brand that has launched world-famous products and eye-catching ad campaigns. But the apparel company, known for Air Jordans and other celebrity athlete endorsements, is struggling to gain liftoff in today’s consumer economy.

Nike stock is down 53% in the past five years. In the past four years, its return on equity has dropped from 43.1% in 2022, to 23.3% in 2025. The company’s quarterly gross profits have mostly gone in the wrong direction since 2023.

NKE Return on Equity (Annual); data by YCharts.

What happened to the stock, and can it ever recover? Let’s look at the latest trends shaping the business’ performance, why this consumer discretionary stock has suffered, and whether investors should feel confident or cautious about Nike’s future.

Nike is being hit by tariffs

Just like many other apparel stocks, Nike is vulnerable to tariffs because it imports its shoes to the U.S. from a global supply chain. On its quarterly earnings call in September 2025, management said it expected tariffs to cost it $1.5 billion in fiscal year 2026, with a tariff-related reduction of 1.2% to its gross margin.

Nike is facing tough competition in China

The company announced its latest earnings for the second quarter of fiscal 2026 on Dec. 18, 2025. Even though earnings per share beat analysts’ expectations, the stock price dropped 10% the day after the earnings call. That drawdown was driven by disappointing news from China, where the quarter’s total revenue from the Greater China market were down 17% compared to the previous year.

This is a sign that China is becoming an increasingly important market for Nike. If Chinese consumers stop buying its shoes, the company’s future growth could stall.

Consumers are more price-sensitive about shoes

The company wants to be a premium brand that can charge full price for its shoes. CEO Elliott Hill was hired in October 2024 to lead a turnaround. He is working to undo moves made by the previous leadership, which focused on helping expand its e-commerce by selling shoes directly to consumers online at a discount. Now, Hill is embracing a strategy of rebuilding Nike’s relationships with its wholesale channel partners and regaining shelf space at brick-and-mortar retailers.

But Nike and other shoe brands might face some challenges in raising prices. U.S. consumers seem to be getting choosier about how much they spend on shoes. The Footwear Distributors and Retailers of America (FDRA) released survey data in October 2025 showing that 48% of U.S. consumers were not planning to buy footwear during the 2025 holiday season, and 65% of likely shoe shoppers agreed that tariffs were a major reason why prices had gone up.

An FDRA survey of shoe executives this month shows that many tariff-related cost increases for shoes are still in the early stages. It found that 29.8% of shoe executives expect their average retail price to go up by 6% to 10%, while another 14.9% expect their average retail price to increase by more than 10%.

If shoe prices go up in a way that makes price-conscious customers close their wallets, Nike might struggle to regain its pricing power. And that could put downward pressure on margins.

Sports “casualization” could be ending

Athletic footwear brands built their businesses in part because of changing consumer behavior around wearing athletic shoes outside of the gym. They have become everyday casual wear at home and office for millions of people.

But if consumer styles and preferences change, this trend could fade away. If shoppers stop thinking it’s cool to wear sports shoes in casual settings, Nike’s business could suffer.

Recent research from Bank of America shows that this “casualization” trend in wearing athletic shoes might not have any more room to run. The bank’s analysts said that sneakers already represent about 50% of global footwear sales, and U.S. participation in sports is not growing. If the market for casual sports shoes is already saturated, this could be bad news for Nike and other athletic apparel brands.

People love sneakers, so it’s hard to believe that the global market for athletic shoes will severely decline anytime soon. But Nike can’t count on brand awareness alone to drive growth. It needs to innovate and create a new generation of must-have shoes that get people to wait in line at the mall. If not, the company is facing strong headwinds that could lead to a future of low growth and shrinking margins.

Bank of America is an advertising partner of Motley Fool Money. Ben Gran has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nike. The Motley Fool has a disclosure policy.

To say that SoFi (NASDAQ: SOFI) has grown impressively would be an understatement. Over the past three years, SoFi’s membership base has grown by 142%, revenue has grown by even more, and the company is now consistently profitable.

A few major growth drivers have been responsible for the stellar recent performance. Personal loan originations have soared, and net chargeoffs have declined. The “loan platform business” that originates loans on behalf of third parties and provides referrals to partners has become a rapidly growing source of high-margin fee income. And the SoFi Invest platform has launched some exciting features, such as options trading and access to private companies. These are just a few examples.

One future billion-dollar revenue stream

For the time being, personal loans are by far the largest part of SoFi’s lending business, accounting for about 77% of loan originations through the first three quarters of 2025. Student loans, the original loan type marketed by the company, is the second largest.

However, one part of SoFi’s business that is overlooked, and shouldn’t be, is home loans.

To be sure, I wouldn’t call SoFi a major mortgage lender by any definition. The company originated about $2.3 billion in mortgages over the past three quarters. For context, Rocket Companies (NYSE: RKT) originated $32.4 billion during the most recent quarter alone.

Although home loans aren’t a big part of SoFi’s business yet, it’s tough to overstate what a massive opportunity this is. For one thing, the real estate market itself is still historically slow, as interest rates have remained high. Not only is home purchase activity slow, but refinancing is, too.

Second, as SoFi’s member base grows, it creates cross-selling opportunities for other products, including home loans. In fact, in the most recent quarter, SoFi’s home loan volume nearly doubled from $490 million to $945 million, so it’s already seeing quite a bit of traction.

As rates (hopefully) come down over the next couple of years, and SoFi’s ecosystem grows by millions of new members, it could create a perfect storm of home loan demand. SoFi could even replicate its personal loan platform and incorporate third-party mortgage originations and referrals. In a typical year, roughly $6 trillion worth of existing homes are sold in the United States. Plus, American homeowners are sitting on $35 trillion in home equity, the most in history. SoFi is well positioned for its home loan business to grow significantly in the years to come.

Matt Frankel, CFP has positions in Rocket Companies and SoFi Technologies. The Motley Fool has positions in and recommends Rocket Companies. The Motley Fool has a disclosure policy.

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Few stocks have had as good a start to 2026 as CoreWeave (NASDAQ: CRWV). In under a month, shares of the data center specialist have risen an incredible 40%. That’s more than most stocks hope to return in a few years, let alone a few weeks. After a run like that, it’s logical to wonder if this is the start of something bigger, or just a fluke.

I think there’s a case to be made for both sides, but I do lean more bullish than bearish on this stock. Here’s why.

CoreWeave is a lifeline for the AI hyperscalers

It’s not cheap or easy to bring the massive amounts of computing power online necessary for training and running generative artificial intelligence (AI) workloads. While AI hyperscalers like Alphabet and Microsoft are building their own data centers to run workloads on, they also don’t want to become asset-heavy businesses. These companies want to stay light and nimble, and having a multibillion-dollar data center on their balance sheet that depreciates does not fit their goal.

While they are content to build some of their own data centers to control costs, it also makes sense for them to rent computing power from other companies, such as CoreWeave. CoreWeave builds data centers, then fills them with cutting-edge graphics processing units (GPUs). Then, clients can rent this computing power from CoreWeave. This is essentially an AI-focused cloud computing business, and it’s growing at an incredible pace.

During the third quarter, CoreWeave’s revenue increased 134% year over year to $1.4 billion. That’s an impressive result, and it’s not expected to slow its growth anytime soon. The company has a $55.6 billion revenue backlog that it has to churn through in a relatively short amount of time. Forty percent of that backlog is scheduled to come to fruition over the next two years, which will result in massive growth.

Growth is CoreWeave’s fuel, as it is producing no profits, which is my only concern with the stock.

CoreWeave is sparing no expense

CoreWeave is doing what every early-stage company with a massive opportunity should do: expand at all costs. It sees a massive, once-in-a-lifetime market opportunity, and it’s sparing no expense to capture every piece of business that it can. It’s sacrificing short-term profitability to do this, which isn’t out of the ordinary in the tech sector. However, this is a bit different.

Most of the time, you see software companies deploy this technique, as they operate in a low-cost field where their product doesn’t depreciate. CoreWeave isn’t in the same boat. GPUs and other computing equipment have a finite lifespan, and they are known to burn out after a couple of years of hard use. This means that CoreWeave needs to pump additional capital into the business to keep it running. This could be a problem in the future, as it would have to sustain rapid growth rates for several years to justify this business model.

As a result, the risk of CoreWeave is very high. It could easily reach a steady-state point where it’s fully profitable and able to replace equipment as it burns out. At the same time, it’s possible that this business model doesn’t work out, and it must charge exorbitant rates to customers just for the economics to work. At that point, it may be cheaper for customers to build their own data center versus rent from CoreWeave, and that could spell disaster for the stock.

So, what do I think will happen? I believe we’re still in the early innings of artificial intelligence computing build-outs. So, CoreWeave’s rapid growth will continue for several years. As a result, its stock will likely continue rising for the time being. However, whether CoreWeave is a long-term success story will be determined by its profitability, and we won’t know about that for a few years.

Keithen Drury has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.