ExclusiveNIKE GOT BOOTED FROM THE S&P 100 — AND A CHIP COMPANY TOOK ITS SPOT

Nike spent decades telling everyone to just do it. Well, Nike just did something. It got kicked out of the S&P 100. After nearly 18 years, its stock hit a 12-year low. About $230 billion in market value, gone. And who's taken its spot? SanDisk, a memory chip company. Nike went from defying cool to losing its seat to computer storage. Ouch. Let's rewind, because Nike didn't fall off overnight. Nike started with a waffle iron. In 1971, running coach Bill Bowerman poured rubber into his wife's waffle maker, trying to create a better shoe sole. He ruined the waffle iron for sure, but hey, he helped invent a new kind of running shoe. Fair trade. That was early Nike. Experiment, take risks, make something better. Then fast forward to 2020. Nike had a new strategy. Why share money with stores when we can sell everything ourselves? Through website, app, Nike stores. Done. So Nike started pulling shoes from long-term retail partners like Foot Locker, while also cutting back on smaller stores that had helped build the brand for years. Basically, thanks for helping us become huge, and we'll take it from there. So there was just one problem. After the pandemic, people went shopping again. And suddenly, Nike needed those stores. But the shelves Nike had left behind didn't stay empty. Hoka moved in, On moved in, New Balance got cool again, Adidas kept fighting. Nike had burned the bridge, then realized it still needed to cross the river. And while competitors were burning fresh shoes, Nike leaned heavily on old favorites like Dunk's, Air Force One's, Jordan 1's. Iconic? Absolutely. New? Not exactly. The Air Force One came out in 1982. So by 2024, Nike needed a reset. So it brought back Elliot Hill, a Nike veteran who originally joined as an intern in 1988 and spent more than three decades there. His turnaround claim is called Wing Now. But the comeback is still a work in progress. Fiscal year 2026 revenue was about $46.4 billion, flat to the previous year. China remained difficult. Converse was still struggling. And in August, Target briefly became more valuable than Nike. Yeah, Target. Even Hill admits profitable growth is going to take some time. Nike spent years walking away from old friends, now is trying to win them and customers back. Nike isn't the only old giant getting pushed out. Look at some of the companies that have left the S&P 100 in recent years, like Colgate-Palmerlev, Honeywell, Simon Property Group, DuPont, and Walgreens. And now Nike. Or in normal English, toothpaste, thermostats, shopping malls, chemicals in drugstores, sneakers. Basically, Main Street America. Now look at who's moving in. Tesla, NVIDIA, AMD, Uber, and this month, Dell, Palo Alto Networks, Arista Networks, SanDisk, Chips, Cybersecurity, Data Center, Storage. The new rich kids have arrived. And apparently they work in tech. Here's one number that shows how much things have changed. In one major fund tracking the S&P 100, NVIDIA made up more than 10%, while Nike, about 0.01%. So Nike wasn't suddenly kicked out. It had already become almost invisible. And there are a few lessons here. First, no company stays on top forever. Apparently. Not even Nike. Second, Wall Street doesn't care much about what you did 20 years ago. It wants to know what you will do next. And Nike can sell millions of sneakers today, but investors are betting that chips, AI, cybersecurity, and data will matter even more tomorrow. And maybe the biggest lesson here? The S&P 100 is basically a group photo of corporate America. 20 years ago, the stars looked very different. Today, technology is taking the front row. Nike didn't just lose its seat. The whole party changed. Okay, one last piece. And this one is bigger than Nike. Nike was global from day one. Before it was even called Nike, the company was Blue Ribbon Sports. The business model was very simple. Import running shoes from Japan and sell them out of a car at running competitions. So buy there, sell here. That was basically it. And Nike, as Nike grew, production moved around the world. Nike usually didn't own those factories. It owned the design, the marketing, the most important thing, the swoosh. Basically, Nike didn't just benefit from globalization. Nike was globalization with better sneakers. For decades, the formula worked beautifully. Design the shoes in Oregon, make them wherever it's cheapest, ship them everywhere. Cheap flights, cheap freight, low tariffs, simple. But the world has turned. Countries want their factories back. Supply chains are coming home. Borders matter again. And when the ground shifts, the tallest building feels it first. So suddenly, Nike's global machine became more expensive to run. The company said tariffs could cost at around $1.5 billion a year. That was a very expensive pair of shoes. Then came a strange twist. After courts knocked out some tariffs, Nike got a refund of nearly a billion dollars. And that one single check made last quarter's profit look great. But strip it out, the numbers were thin. You know, when your best quarter comes from a refund, that's not a comeback, that's a coupon. Look, we're not here to argue policy. The fact is that the world has changed. Even Hill put it simply on an earnings call. He said, we're controlling what we can control. And maybe that's the whole Nike story. Nike was never just selling shoes. It was selling a story. A coach, a waffle iron, athletes pushing themselves, just do it. Somewhere along the way, the story got outsourced too. But the company became too good at managing a global machine. Companies rise, companies fall. But the stuff that built Nike in the first place, the discipline, the craft, the family shop that carried you for 30 years, that never gets removed from any index. You only lose those things when you choose to. All right, that's it for today. Thanks for watching. I'll see you in the next one.