Brandon Carson; crop by Another Believer / Wikimedia Commons. Nike campus, 2010. CC BY 2.0.

Yesterday, Nike was an earnings preview. This morning, it’s a much harder turnaround discussion.

The company expects fiscal 2027 revenue to fall by high single digits, with adjusted earnings of $1.15–$1.35 a share. Nike traded at $31.90 at 4:24 a.m. ET, about 9.2% below Thursday’s close, in Yahoo Finance’s early premarket snapshot. That reaction belongs to the new results; Thursday’s regular-session decline came before the announcement.

Quarterly revenue fell 4% to $11.2 billion. Direct sales dropped 8%, including a 13% decline online, while wholesale slipped just 1%. Gross margin improved to 42.8%, helped by lower warehousing and logistics costs. Earnings were 48 cents a share.

The contrast matters. Selling more through partners can help rebuild distribution, but it doesn’t automatically fix weaker demand in Nike’s own channels. Better logistics also protect profit without proving that shoppers have started buying more shoes. Those are useful improvements; investors still need evidence that the product is pulling people back in.

Reuters reported that China sales fell 26% on a currency-neutral basis, and that the new restructuring includes further job cuts and changes to Nike’s regional organization. The weakness reaches beyond one disappointing website or a single quarter’s comparison. Reuters’ account of the turnaround puts the China problem in context.

Nike’s response is a program called Pace, targeting $2.5 billion in cumulative savings through fiscal 2031 against roughly $1 billion in pretax charges over that period. That is a multiyear savings target, before charges and reinvestment—not an extra $2.5 billion of annual profit. The adjusted earnings guidance also excludes about 15 cents of fiscal 2027 restructuring expenses.

Our read: The test is whether operating improvements buy Nike enough time to rebuild demand. Cost savings can make a smaller business more profitable, but a recovery in sales would make the turnaround much more convincing. The next few quarters need to show that the two can happen together.

See Nike’s channel breakdown and full-year guidance.

Jelson25 / Wikimedia Commons. Mattel headquarters, 2012. CC BY-SA 3.0.

Mattel shares jumped 18.8% to $15.04 Thursday after Reuters reported takeover interest from Authentic Brands Group. The potential valuation could reach $6 billion or more. The Wall Street Journal, cited in the report, put private discussions above $20 a share.

That last number is a reported discussion price, not a signed offer. There is no agreed transaction to put on the calendar. At Thursday’s close, $20 would still be roughly one-third higher, but the gap reflects uncertainty about whether negotiations produce a deal, on what terms, and with what financing.

Barbie and Hot Wheels give a buyer more to work with than a toy factory. A recognizable character can earn money through products, games and entertainment. The appeal is collecting more income from brands consumers already know, without needing to create the next hit from scratch.

The operating results explain why a bid would attract attention. In its latest reported quarter, Mattel’s revenue rose 10% to $1.125 billion, but adjusted operating income fell to $39 million from $96 million. Adjusted gross margin slipped to 48.6%, with tariffs, inflation and royalties among the pressures. Revenue growth was not reaching profit at the same pace.

Nor is the portfolio moving together. Vehicle billings rose 14%, led by Hot Wheels, while dolls fell 5%, primarily because of Barbie. Mattel is also investing in digital games. Those differences matter to a prospective owner deciding where to spend, license more aggressively or cut costs. Mattel’s latest results show the business beneath the takeover headline.

Our read: There are now two questions behind this stock: what the brands could be worth to a buyer, and what shareholders earn if Mattel remains independent. An approach raises the first question’s importance. It doesn’t make the second disappear.

Read what’s reported about the approach—and what remains undecided.

Twilio. CEO Khozema Shipchandler; company portrait.

Twilio will replace Warner Bros. Discovery in the S&P 500 before trading opens on October 6, according to S&P Dow Jones Indices’ Thursday-evening announcement. FormFactor takes Twilio’s place in the S&P MidCap 400.

That creates a specific near-term catalyst. Funds that track the index need to reflect its new membership. Other investors can trade ahead of that adjustment, so inclusion can change demand for the shares before the official effective date.

It does not change what a customer pays Twilio to send a message or run a call. The company still has to earn its valuation through the business, even if the shareholder register is about to get bigger.

There is an operating story underneath. Twilio’s latest quarterly revenue was $1.50 billion, up 22% reported and 17% organically. GAAP operating income was about $85 million. Its much larger $6.68 GAAP earnings-per-share figure included a $5.91 noncash tax benefit; adjusted EPS was $1.47. That distinction prevents an index headline from turning into an exaggerated picture of recurring earnings. The earnings release explains the tax adjustment.

Our read: Index demand is a reason for attention now. Sustained customer growth and operating profit are the reasons it might last. Keep those two timelines separate when watching the stock around the rebalance.

Check the official addition and effective-date table.

Sea Cow / Wikimedia Commons. Amazon’s Seattle campus, 2022. CC BY-SA 4.0.

AI’s next financing question is becoming quite literal: who owns the expensive equipment?

Amazon is discussing a structure involving roughly $8 billion of Nvidia chips, according to a Financial Times report covered by Reuters. The chips would move into a separate vehicle and be leased back to Amazon, with outside investors providing financing. It is a proposed arrangement, not a completed sale.

That is different from Amazon deciding it no longer needs the chips. Under a leaseback, the equipment can keep serving the same business while ownership and the funding burden change. Amazon would still owe lease payments. Outside investors would need to assess the equipment’s useful life, resale value and the reliability of that rental income. How Amazon’s proposed chip deal would work.

Broadcom offers another version. Reuters reported Thursday that an Anthropic prospectus outlines up to $42 billion in equipment financing from Broadcom, with provision for a financing partner. The arrangement involves convertible debt and supports a much larger multiyear compute commitment. It is a financing ceiling, not $42 billion of cash already handed over. Reuters’ report on the Anthropic facility.

Our read: Both arrangements could keep infrastructure building without requiring the end user to fund every purchase immediately. They also make reported AI demand harder to interpret. A chip order, a loan commitment and a long-term lease may all describe parts of the same expansion.

For investors, the useful question is how much cash eventually comes from customers paying for AI services. Financing can bridge the gap while usage grows. It cannot, by itself, show that the revenue will cover the equipment and its funding costs.

Planet Labs PBC, via NPR / KPBS. Suncatcher prototype.

While the industry works out who pays for data centers on Earth, Google has started testing another address.

Its Project Suncatcher prototype launched Thursday with Planet, and Google says the team has established contact. The mission will test how its Tensor Processing Units perform in the space environment. This is an actual hardware experiment, a step beyond a presentation about the possibility of orbital computing.

The attraction is access to abundant solar energy. The difficult part is turning that energy into dependable computation while dealing with radiation, heat and communications. Getting a chip into orbit is only the beginning of finding out whether operating it there makes economic sense.

Our read: For Alphabet investors, this belongs in the long-term research column. Successful tests could make a much larger project more credible, but they are not a new cloud revenue stream today. The useful milestone is what Google learns about performance and reliability, rather than how futuristic the launch sounds.

See the mission update and Google’s underlying research.