Jim Cramer Weighs In on Nike vs. On Holding: Both Stocks Have Plunged, but the Turnaround Stories Diverge
Jim Cramer has been vocal about two of the most closely watched names in athletic wear: Nike, Inc. (NYSE:NKE) and On Holding (NYSE:ONON). Both stocks have tumbled more than 35% so far this year, but the reasons behind the declines—and the paths to recovery—are distinct.
For Nike, Cramer’s tone has shifted over time. He spent much of 2025 expressing confidence in the company's leadership and its turnaround strategy, but in recent appearances he has sounded more cautious. On his August 17 show, he explained why he changed his mind on Nike and also weighed in on the management shakeup at On Holding.
Nike’s fiscal fourth-quarter earnings, released in June, beat analyst estimates on both revenue and profit. Wholesale revenue rose 4% to $6.6 billion, and the company posted no inventory growth while gross margins expanded by 890 basis points—a sign that cost controls are taking hold. Cramer has previously noted that Nike lost ground in physical retail by ceding shelf space while over-indexing on digital channels. This quarter’s wholesale rebound suggests some of that lost ground is being retaken.
Still, the turnaround is far from complete. Nike continues to struggle with soft demand in emerging markets, where inflation is pressuring consumers. A large part of the margin gain came from tariff recovery, and both the Converse brand and the digital business remain weak. Whether the stock can find a sustainable tailwind will likely depend on inventory discipline, cost management, and the ability to claw back shelf space at key retailers.
On Holding, meanwhile, reported second-quarter results on August 11 that underscored its growth ambitions—and the challenges that come with them. The company’s enterprise value-to-revenue multiple stands at 2.26, almost double Nike’s 1.33, reflecting the market’s high expectations. On delivered a gross profit margin of 65.4%, which, unlike Nike’s, was not tied to tariff refunds. Its training business grew 40% year over year, and apparel jumped 47.7%, prompting management to raise full-year gross margin guidance to 65%.
But On also reported a revenue miss for the quarter, and growth in the Americas decelerated from 17% in Q1 to 13% in Q2. Wholesale growth slowed, and inventories surged 31%—a red flag for a company that investors have come to associate with premium positioning and lean operations. This mixed picture helps explain why Cramer said in May that he would “pass” on the stock, a stance he has maintained even as management changes and new product launches fuel optimism.
Hedge fund positioning offers another layer of context. According to Insider Monkey’s data, 71 funds held a stake in Nike at the end of the second quarter, compared with 52 for On Holding. Some large investors have been making big moves: BAMCO Inc. increased its Nike position by 75% to $599 million, while Citadel Investment Group raised its On Holding stake by 85% to $251 million.
Both companies are navigating a complex environment—sluggish consumer demand, changing retail dynamics, and the ongoing shift in how athletic apparel is sold. Nike remains the larger, more established player with a clear cost-focused plan. On is the challenger with explosive growth but a valuation that leaves little room for missteps.
While these two names offer very different risk-reward profiles, our team continues to look beyond the traditional sportswear space for opportunities. In particular, we believe certain AI stocks may offer stronger return potential with less downside. If you are looking for an AI stock that could have 100x upside, check out our report on the cheapest AI stock.
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Disclosure: None.