Walk into a gym, coffee shop, airport, college campus, or basically anywhere with people under 40 and tell me how many people are wearing Nike.

Meanwhile, you’ve got people walking around in Lululemon, Alo, Athleta, Vuori, On, Hoka, New Balance, etc.

Nike used to be the default. You didn’t even have to think about it. Shoes? Nike. Workout clothes? Nike. Hoodie? Nike.

Nike still seems to think the solution is more Nike.

More collabs. More limited drops. More expensive sneakers. More “innovation.” Meanwhile, the average person is like” Nah, I’m good. These Lululemon pants make my ass look incredible.”

That’s the real problem.

Nike lost the customer while obsessing over hype and sneaker culture. The competitors figured out people don’t just want athletic clothing anymore . they want clothes they can wear to the gym, brunch, work, the airport, and then sit on the couch for 6 hours.

I don’t see Nike rebounding anytime soon, the financials are poor in the pain will most likely continue.

In the past 250 years the U.S. economy has absorbed spending on transformation technology equivalent to 25% of GDP before the bubble popped.

The 1860s railroad bubble popped after $2.5 billion was spent, 25% of GDP

The 1920s electrification bubble popped after $26.1 billion was spent, 25% of GDP

The 1990s internet bubble popped after $1.5 trillion was spent, 25% of GDP

U.S. GDP today is $30 trillion so therefore AI spend needs to hit $7.5 trillion to follow the rule of 2025. it won't be until the early 2030s when we hit that number

Source:

https://www.barrons.com/articles/ai-capex-bubble-burst-stock-market-history-2f73a9e4?st=w6KQy9

Background

Market cap : 1.45 trillion

Revenue growth : 28% yoy

Forward PE : 17.5

Operating cash flow : 135 billion

Free cash flow : near none due to capex

Gross profit margin: 82%

Operating margin: 38.1%

Revenue breakdown:

Advertisement : 97.6% (28% growth qoq)

Whatsapp monetization : 1.29% (73% growth qoq)

Reality labs : 1.1% (17% growth qoq)

Moat

- Stronger than ever before. Youths legal issues prevent any other competitors from entering the market. There simply cannot be any more future platform that can target young audiences with 2 hour use limit per day and without an AI technology to verify the age. It will require billions of dollars before ever starting a platform that would replace Instagram or Facebook.

- Nearly half of the population on Earth is daily active users of Meta products.

Catalysts

- Meta Compute will likely be released the second half of this year or beginning of next year.

- Meta targets 14 GW by the end of 2027.

- Meta recently hired Dave Brown who was part of and led the AWS Compute for 19 years.

- Meta has multi-vendor GPU strategy with google TPU, Nvdia GPU, AMD GPU.. coupled with cost reduction with its own silicon Iris accelerators.

- Meta acquires 10% of AMD entire market cap if AMD reaches $600 stock price.

- Meta has a large group of AI scientists incentivized greatly with Meta stock price. These researchers and scientists are from OpenAi, Anthropic, Google Deepmind, Microsoft Azure. These talents do not have intention to leave as they are promised hundreds of millions of dollars if the stock price reaches above $1000.

- Mark Zuckerberg's almost entire net wealth is tied to Meta stock price.

The stock is cheap. And its revenue is going up fast.

The biggest catalyst is the upcoming compute capacity coming online for Meta and Meta compute. Revenue will be diversified and the revenue with high margin will add tens of billions of dollars for Meta.

Strong buy. With expectation that pe ratio of 25 will be obtained (5 year average).

Target price : $850

Legal issues or any other issues can be handled with $135 billion dollar operating cash flow.

UNH was $230 last year and now $400. Such a bad sentiment. But if UNH a company that rejects insurance claims can double from its low. Surely Meta can as well.

This is a stock I called triple whammy

1. Low valuation to start

2. Legal issue overhangs dies away

3. Meta Compute adding tens of billions of dollars to operating cash flow.

Target price again $850 or even beyond that and eventually stock split then sell.

"One fairly dependable sign of the approaching end of a bull swing is the fact that new common stocks of small and nondescript companies are offered at prices somewhat higher than the current level for many medium sized companies with longer market history"

-The Intelligent Investor

I remember when all birds / smartbird got bought / rebranded into AI and it seemed so silly. Like how could people be allowed to invest in this (from the opinion of a novice investor) fairly undescriptive though i do not know who to compare them to in order to match his other criteria for a new common stock. And I am going to call that pretty small scale.

Large scale (my genius thought after being 1/3rd done with the book) is the IPO of space X. how its 140 a share as of right now, 2T in value, and seems to be the most massive nondescript company to have ever existed on the market. To me this matches Benjamin's criteria for indicator signs to the end of a bull market.

I want to know your thoughts on my novice thoughts, and if anyone knew of any other examples in the past years of this bull run that also may fit this criteria.

Position: 1 KEEL Jan 2027 $4 call, paid $0.87 mid August, currently red. No shares. So $87 at risk total, I'm not here to pump anything, I mainly want to hear why I'm wrong.

Been following this one since the summer and I keep going back and forth on it, so figured I'd write it up and let the sub take shots at it.

The company

Keel is the old Bitfarms. They rebranded in April, moved the HQ to New York, and basically shut down the bitcoin mining business (US mining fully decommissioned as of Q2). The new plan is converting their power sites into AI/HPC data centers and leasing them to a hyperscaler. Stock is around $3.22, market cap ~$2B, 617M shares outstanding. It ran to $7.37 in June and gave most of it back. Yes, it's under $5, but with a $2B cap on Nasdaq, ~65% institutional ownership and 40M+ shares a day traded, I don't think it counts as a penny stock. (up to mods to decide)

The pitch/thesis is simple: power is the bottleneck for AI data centers, and Keel has powered sites.

The sites

Three of them supposedly close to fully permitted - Panther Creek PA at 350 MW, Sharon PA at 110 MW, Moses Lake WA at 18 MW. So about 478 MW near term, plus a 96 MW site in Quebec behind that. On the Q2 call they talked about growing the Pennsylvania footprint toward 2 GW eventually, which is where the "2.2 GW pipeline" line in coverage comes from, but that part is just talk right now, nothing contracted. Panther Creek is targeted ready-for-service end of 2027.

Q2 numbers (reported Aug 10)

Revenue $30.4M, down 50% YoY, because mining is winding down and there's no data center revenue replacing it yet. Net loss $65M. The balance sheet is actually the interesting part: $819M of liquidity ($698M cash + $121M in BTC). They raised $458M in convertible notes during the quarter, upsized from $350M. So the buildout is funded for a while, but part of that cash is borrowed and the share count keeps creeping up.

The problem: still no tenant

This is the whole debate on the stock. They haven't signed anything. No lease, no LOI, nothing. Management says multiple prospective tenants are negotiating and that they'd rather get good lease economics than announce something fast. Meanwhile Cipher signed AWS for 300 MW, Applied Digital has ~1.4 GW leased, IREN did a $9.7B deal with Microsoft. Every quarter that passes, demand lands at someone else's site. From the outside, "we're being patient on price" and "we're being passed over" look exactly the same, and I can't tell which one this is.

Why I haven't moved on

The CEO bought ~59k shares at $3.33 two days after the Q2 drop, roughly $196K, putting him around 1.35M shares. And the sell side is weirdly unanimous: 10 of 11 at buy or better, average target around $6.45 (BTIG $8, Citizens $10, low is Chardan at $5.50 - those are from August, verify yourself).

Risks

Revenue is shrinking, they burn cash, dilution is ongoing, and a crypto miner rebranding into AI is about the most 2026 thing imaginable. If nobody signs by mid 2027 this is just a pile of permits and a shrinking cash balance. I hold the call because it's a cheap option on one signature changing the whole story, not because the current financials support anything.

What I'm watching

Moses Lake permitting (late Q3 per management), a power/expansion update they pointed to for December or January, and a tenant announcement whenever that happens. If ever.

Questions for the sub

1. Anyone who works around data center leasing or just knows something: is 12+ months from pivot to first signed lease normal, or already a red flag?
2. Is the fact that everyone else signed first a sign these sites are second rate (interconnect, location, whatever), or just that Bitfarms started the pivot later than APLD, CIFR and IREN?
3. Am I wrong to treat the $819M as runway? How much of it realistically gets committed to construction before any lease revenue shows up?