☁️ Google: Biggest Deal Ever
A $32B cybersecurity bet to rival Azure and AWS
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In case you missed it:
At NVIDIA’s GTC 2025 this week, CEO Jensen Huang projected AI-driven data center spending to top $1 trillion by 2028 as enterprises shift from traditional data centers to AI factories.
Beyond infrastructure, AI is stepping into the physical world—powering robotics, digital twins, and multimodal intelligence. The future workforce? Billions of AI agents working alongside humans, reshaping entire industries.
Today at a glance:
👟 Nike: Sole Searching
☁️ Google: Biggest Acquisition Ever
🌐 Accenture: AI Gains, Federal Pains
👟 Nike: Sole Searching
Nike’s Q3 FY25 results (February quarter) highlight a company in transition. Facing a brand reset, management overestimated digital demand while underestimating the importance of retail distribution. Consumers shifted toward function-first footwear, leaving Nike struggling to keep pace.
Distribution Dilemma
Nike’s wholesale pullback backfired, shrinking its shelf space while opening doors for rivals like Hoka, On, and New Balance. Now, under CEO Elliott Hill, it’s rebuilding retailer ties while trying to reignite premium sales through digital and doubling down on sports marketing. The turnaround hinges on recapturing lost ground—without losing more in the process.
In Q3, revenue fell 9% year-over-year to $11.3 billion ($240 million beat). It was not as bad as feared, but the numbers were ugly:
Footwear sales plunged 12%.
Converse tumbled 20%.
China dropped 17%, where demand continues to weaken.
Wholesale revenue slid 7% to $6.2 billion, showing challenges to regain shelf space from rivals.
Nike Direct revenue fell 12% to $4.7 billion, as digital sales tumbled 15%, signaling weak demand on Nike’s own website and app.
Margins are under pressure, with gross profit down 3 percentage points to 41% due to higher discounts and inventory write-downs. In addition, Nike boosted marketing spend to 10% of revenue, hoping to reignite brand momentum. As a result, net profit dropped 32% to $0.8 billion. EPS of $0.54 beat consensus ($0.28 expected), but the bar was very low.
Inventory & Strategy Shake-Up
Nike’s inventory declined 2% to $7.5 billion but remains “elevated across all categories.” To regain pricing power, the company is cutting supply on classic sneaker lines like Air Force 1 and Pegasus, while pushing newer, higher-priced models like Air Max.
Its "Win Now" strategy aims to reignite brand momentum through:
Wholesale recovery: Rebuilding lost retailer relationships.
Big marketing bets: Super Bowl ads, athlete partnerships.
New products: NikeSkims, a women’s line co-developed with Kim Kardashian.
What’s Next?
Nike warned of a double-digit revenue decline in Q4 (May quarter), citing tariffs, weak consumer spending, and currency volatility. Analysts see FY25 as a reset year, with Jefferies predicting a V-shaped recovery by FY27.
With shares at a 10-year low, bulls see a turnaround play. But Nike still has work to do to reclaim its dominance.
FROM OUR PARTNERS
Today’s Fastest Growing Company Might Surprise You
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📲 Mode saw 32,481% revenue growth from 2019 to 2022, ranking them the #1 overall software company on Deloitte’s recent fastest-growing companies list2 by aiming to pioneer "Privatized Universal Basic Income" powered by technology — not government. Their flagship product, EarnPhone, has already helped consumers earn & save $325M+.
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☁️ Google: Biggest Deal Ever
Alphabet just made its biggest acquisition ever, striking a $32 billion deal to buy cloud security startup Wiz. The purchase eclipses the $12.5 billion Motorola Mobility deal and nearly equals what it spent on its top 10 acquisitions combined.
Wiz (expected in 2026): $32 billion
Motorola Mobility (2012): $12.5 billion
Mandiant (2022): $5.4 billion
Nest Labs (2014): $3.2 billion
DoubleClick (2007): $3.1 billion
Looker (2020): $2.6 billion
Fitbit (2021): $2.1 billion
YouTube (2006): $1.7 billion
Waze (2013): $1.2 billion
HTC smartphone unit (2018): $1.1 billion
A Second Chance
Last year, Wiz rejected Alphabet’s $23 billion offer, betting it could thrive independently or go public. But the Mountain View giant stayed persistent, keeping lines open with Wiz’s leadership while competition for the company grew.
When Alphabet came back to the table, Wiz had seen its annual recurring revenue jump from $500 million to over $700 million, and the cloud security market had become even more critical. This time, the deal moved quickly—with Alphabet outbidding rival suitors and reportedly offering a $3.2 billion breakup fee Google would pay to Wiz if the deal collapses.
Why Wiz? The Cloud Security Race
Founded in 2020, Wiz skyrocketed to become a dominant cybersecurity player, with over 45% of Fortune 100 companies relying on its tools.
As businesses increasingly operate across multiple cloud platforms, security is a growing concern. Wiz specializes in cloud-native cybersecurity, allowing companies to detect and respond to threats across Google Cloud, AWS, and Microsoft Azure. By acquiring Wiz, Alphabet isn’t just enhancing its security capabilities—it’s making a play for large enterprise customers that use multiple cloud providers.
Additionally, Wiz’s expertise complements Mandiant, the cybersecurity firm bought in 2022 for $5.4 billion. Together, they bolster GCP’s position as a serious competitor to Microsoft, which dominates cloud security with $20 billion+ in annual revenue.
What’s Next?
The deal faces regulatory scrutiny, especially with Alphabet already under pressure from antitrust investigations. With a significant breakup fee, the company is confident it can clear the hurdles. If successful, this move could reshape GCP’s security offerings, boosting its position as AI-driven cloud computing takes center stage.
🌐 Accenture: AI Gains, Federal Pains
Accenture beat expectations for its Q2 FY25 (ending in February) but took a hit as investors focused on risks from US federal spending cuts. The consulting giant reported $2.82 EPS ($0.03 beat) on $16.7 billion in revenue, up 5% year-over-year.
Generative AI Bookings: A Bright Spot
Despite a 3% dip in new bookings to $20.9 billion, Gen AI bookings hit $1.4 billion—another record. AI deals are now showing up in revenue, with $600 million in Gen AI sales this quarter.
Over the past 12 months, Accenture’s Gen AI bookings have tripled to $4.5 billion—more than OpenAI’s estimated $3.7 billion in 2024 revenue. AI’s biggest winners aren’t always the ones grabbing headlines.
Accenture has expanded its data & AI workforce to 72,000, keeping pace with its 80,000 target by FY26. Large-scale transformations remain in demand, reinforcing Accenture’s role as a key player in enterprise reinvention.
Federal Spending Cuts Cloud the Outlook
Accenture’s federal services unit faces headwinds as the new administration’s Department of Government Efficiency (DOGE) tightens spending. With $8 billion+ in federal contracts under review, revenue growth could slow, impacting 8% of the company’s business.
What’s Next?
Accenture narrowed full-year guidance to 5%-7% revenue growth, reflecting both AI-driven momentum and federal uncertainty. With a $3 billion acquisition budget, Accenture is betting big on expansion—but will it be enough to offset federal headwinds?
That's it for today!
Stay healthy and invest on!
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Disclosure: I own AMZN, GOOG, and NVDA in App Economy Portfolio. I share my ratings (BUY, SELL, or HOLD) with App Economy Portfolio members.
Author's Note (Bertrand here 👋🏼): The views and opinions expressed in this newsletter are solely my own and should not be considered financial advice or any other organization's views.
Partner Disclaimers:
1 Mode Mobile recently received their ticker reservation with Nasdaq ($MODE), indicating an intent to IPO in the next 24 months. An intent to IPO is no guarantee that an actual IPO will occur.
2 The rankings are based on submitted applications and public company database research, with winners selected based on their fiscal-year revenue growth percentage over a three-year period.
3 A minimum investment of $1,950 is required to receive bonus shares. 100% bonus shares are offered on investments of $9,950+.