Motley Fool Money
Episode: Can These Three 2025 Losers Turn It Around?
Release Date: December 29, 2025
Host: Tim Byers
Guests: Travis Hoyam, Tom King

Episode Overview

In this year-end episode, host Tim Byers and analysts Travis Hoyam and Tom King examine three notable underperformers of 2025: Super Micro Computer (SMCI), Lululemon (LULU), and Nike (NKE). The team dissects what went wrong for each, considers prospects for a turnaround in 2026, and debates whether investors should see these stocks as value opportunities or value traps. The conversation flows with the Fools' characteristic curiosity, candid disagreement, and focus on long-term investing.

Key Discussion Points & Insights

1. Super Micro Computer (SMCI)

• Background:
  SMCI builds and customizes servers, working closely with AI chip suppliers like Nvidia and AMD. Their main client base is large data centers.
• 2025 Issues:
  Severe accounting concerns flagged by auditors Ernst & Young, leading to a crisis of confidence in their reported numbers and business health.
• Financial Red Flags:
  • Shift from conservative management to aggressive debt-fueled inventory build-up:

    “At the beginning of 2024, they started taking on a significant amount of debt. Since then, they've borrowed $4.4 billion...used that money to build and buy inventory. They increased it by $3.3 billion.” — Tom King [02:53]

  • Risks if the AI demand boom slows or inventory can’t be sold.
• Panel View:
  Both guests are highly skeptical about a quick turnaround:
  • Auditors’ distrust is a major warning sign.
  • Revenue is trending in the wrong direction, even as AI remains hot.

  "If the accountants don't believe the numbers, we shouldn't necessarily believe the numbers or management in general." — Travis Hoyam [04:02]

  • Supermicro may still get a lift if Nvidia-related backlog materializes ($13B for Nvidia Blackwell Ultra systems), but uncertainty is very high.
• Consensus:
  Stay on the sidelines for 2026; risk of deeper trouble outweighs potential reward.

2. Lululemon (LULU)

• Background:
  Well-known for its premium athleisure wear, Lululemon suffered a dramatic underperformance in 2025, lagging the market by about 60% YTD.
• 2025 Issues:
  • Dropping same-store sales in the Americas (down 5% in Q3 2025)
  • Inventory buildup and stale product lines (the “breeze through” collection flopped)
  • Intensifying competition, particularly from hot upstart brands Hoka and On
• Valuation & Brand Discussion:
  • Travis argues the stock looks cheap on a P/E basis, but...

    "The problem with fashion and brands like this is it's really hard to stay on top. You've got companies like Nike—they stayed on top for what, 30, 40 years?...That's not typically the way things work." — Travis Hoyam [08:15]

  • Fears that Lulu’s run as “the yoga brand” may be over, with consumer excitement and athletic trends shifting to other brands and activities.
  • Worries about a potential value trap for investors:

    "Right now, I think, you know, stocks like On, like Deckers Outdoor, which owns Hoka, are a little more attractive...Lululemon...I just worry that this is going to be a value trap for a long time." — Travis Hoyam [08:15]

• Counterpoint/Optimistic View:
  • Tom takes the bull case:

    "Neither of those two things has happened with Lululemon. The cycle has turned against them. People are stretched...they can't justify spending 130 bucks on yoga pants. I think that eventually that will change. I think that Lululemon hasn't lost its brand." — Tom King [10:21]

  • Points out that Lululemon hasn’t suffered brand damage or accounting scandal (unlike Under Armour’s meltdown).
  • While the CEO is leaving, the brand and long-term product strength remain intact.
  • Sees a 3-5 year opportunity even if 2026 remains choppy.
• Consensus:
  Split opinion:
  • Travis: Skeptical, sees longer-term decline.
  • Tom: Sees long-term rebound, worth holding through the cycle.

3. Nike (NKE)

• Background:
  Sportswear giant suffered a 25% YTD underperformance, with new CEO Elliot Hill attempting to engineer a turnaround.
• 2025 Issues:
  • Strategic missteps: Pulled products from wholesalers to control distribution (copying Lululemon), then reversed course after losing prime shelf space to upstart brands.

  "...upstart brands like Hoka and On have kind of taken that shelf space. And I think Nike is now coming back to these retailers sort of cap in hand and saying, hey, can we please have some shelf space back?" — Tom King [14:46]

  • Difficulty adapting to the new market, where social media and direct-to-consumer strategies trump the old supply-driven model.
  • Market share and brand energy are shifting to “internet-native” competitors.
• Valuation & Future Outlook:
  • Nike appears expensive (35x earnings, 2.2x EV/sales) given slow growth, while competitors like On are both cheaper on a price/sales basis and growing faster.
  • Travis sees Nike as structurally challenged:

    "Nike, their future looks a lot more like Under Armour than it does like an On holding...when you lose that power position, when the market changes, you are just fundamentally not structured to adapt." — Travis Hoyam [16:26]

• Tariff Relief Discussion:
  Both Tom and Travis agree that even removal of tariffs wouldn’t be enough to reverse Nike’s troubles.
• Consensus:
  Both are bearish: Nike is not poised for a comeback in 2026.

Notable Quotes & Memorable Moments

• On SMCI Accounting Troubles:

  "If the accountants don't believe the numbers, we shouldn't necessarily believe the numbers or management in general." — Travis Hoyam [04:02]

• On Lululemon’s Brand Value:

  "I think that Lululemon hasn't lost its brand. I know that people's tastes change...But I think it's a company that has that brand. It has maintained its strategy. It's made a few mistakes. The CEO is leaving...I definitely have faith in it as a good investment over, let's say, three to five years." — Tom King [10:21]

• On Nike’s Loss of Retail Power:

  "Nike is now coming back to these retailers sort of cap in hand and saying, hey, can we please have some shelf space back? So until they figure that out...I would avoid Nike." — Tom King [14:46]

• On the Industry Shift:

  "Nike grew up in a world where supply owned the market...In the world where Hoka and On are growing up, the market works very differently. You advertise on Instagram...The problem is the companies that have grown up Internet native...have grown in that space and now they're starting to take Nike's space." — Travis Hoyam [16:26]

• On Turnarounds and Tariff Relief:

  "If there is significant tariff relief, does your opinion change?" — Tim Byers [18:40]
  "No, I don't think the tariff relief will be enough." — Tom King [18:58]

Timestamps for Important Segments

• Super Micro Computer (SMCI) Deep Dive: [00:32] – [05:07]
• Lululemon (LULU) Analysis: [07:05] – [12:12]
• Nike (NKE) Discussion: [13:40] – [19:04]
• Tariff Relief Quickfire: [18:40] – [19:04]

Conclusion

This episode dives into why three former market darlings fell so hard in 2025 and explores—with equal measures of skepticism and long-term optimism—what it would take for each to stage a comeback. The overall tone is measured, candid, and data-driven, emphasizing the difficulties of turnarounds in cyclical and fast-moving markets. While the Fools are open to surprises, both guests agree that SMCI and Nike aren't attractive bets for 2026, while Lululemon splits opinion based on brand durability and consumer cycles.

Useful for investors considering whether to bottom-fish among the 2025 “losers” or remain cautious as new market leaders emerge.