What's going on here?

Bill Ackman’s Pershing Square doubled down on its Nike investment last quarter.

What does this mean?

Pershing Square's Nike bet rose to $1.4 billion in the third quarter, up from $220 million at the end of the second quarter.

Nike may be down, but as any sports fan knows, that doesn’t mean it’s out. The company’s stock has slumped 30% this year, which just might bring long-term investors back into the arena. Sure, the firm’s had some challenges – slowing global demand and a sales strategy revamp that badly missed the mark, to name just two. But the swoosh-emblazoned sportswear brand is still the undisputed champ of this league, with a 40% market share. And with Nike veteran Elliott Hill coming out of retirement to serve as its new CEO and a big 40th-anniversary celebration in the works for the iconic Jordan line, this firm could be ready to rally.

Why should I care?

For markets: 35% potential upside in the next year.

Running the numbers based on conservative estimates, Nike has an upside potential of at least 35% over the next 12 to 18 months, making it a compelling opportunity for those who love a good comeback story. But if global economic conditions worsen, consumer spending could take a big hit, affecting Nike’s sales, particularly in North America.