Should You Buy the Dip in Nike Stock While the Market Is This Nervous?

As of this writing, over the last five years, Nike's (NYSE: NKE) stock price has dropped by 76.5%. And in 2026 alone, the stock price has fallen nearly 40% compared to the S&P 500's gain of roughly 12%.

Given that Nike is an iconic brand that remains profitable and that the market as a whole has been experiencing recent volatility, it's fair to wonder whether this stock is a buy-the-dip candidate. That said, there's a reason investors shouldn't buy the dip in Nike stock quite yet, but it may not be the one most people think of.

Image source: The Motley Fool.

How to view Nike as an investment

Back in 2021, Nike was flying high, highlighted by blowout fourth-quarter earnings, with sales of $12.3 billion representing a 96% increase from the prior-year period. Those days are long gone, however, as Nike expects a high-single-digit percentage drop in revenue for fiscal 2027.

At this point, the question of whether it's worth buying the dip isn't about whether Nike can return to a hypergrowth stage and increase its revenue by 100% from quarter to quarter, because the answer is that it likely will not. Rather, the reason to consider buying Nike stock on the dip would be if investors want to add it as an income stock to their portfolio.

The stealthy dividend stock

Nike is becoming a more mature company, and even though it's faced its share of struggles over the last several years, it is still profitable. Net income in its first quarter of fiscal 2027 was $712 million, down from $727 million in the prior-year period, but the keyword there is net income, showing that it's still hauling in massive amounts of profit each quarter.

Pair that with the $8.3 billion in total cash it has compared to $11.1 billion in total debt, and Nike seems to be in the position to keep paying out a dividend. And while the company isn't quite in the same category as Dividend Kings, as it hasn't increased its dividend payout for 50 or more consecutive years, as of November 2025, Nike is working its way up to that status, having increased its dividend payouts for 24 consecutive years.

That all said, for me, Nike would need to show at least stable revenue generation, rather than declines, to be considered an income stock investment. I would also like to see, even if only modestly, if it can generate more sales than expected over the coming quarters and can boost its full-year forecast at some point. It just needs to offer more reliability so that the stock price doesn't keep falling and negate the dividend payouts. Once the stock price stabilizes, it would be worth a look as an income stock, with its dividend currently yielding 4.2%. But for now, I'm fine with not buying the dip.

Jack Delaney 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.