Happy Saturday afternoon to everyone on The Street.

And, welcome back to our new deep dive edition, in which we’ll double-click on a sector, metric, or other investing-related topic we feel isn’t getting the shine it deserves.

Today, we’re covering an industry that was infamously prohibited from even being an industry for some hundred years — until now.

🛎️ You currently have 0 referrals, only 1 away from receiving JPMorgan's Top Picks For June.

TOGETHER WITH THE MOTLEY FOOL

AI-ighty Potential

Dubbed the "the rocket fuel of AI" by Wired, this groundbreaking innovation has sparked fervent excitement across Wall Street. And with projections soaring to a potential market cap of $17 trillion – equivalent to 9 Amazons – the magnitude of its impact cannot be overstated.

But here's the real deal: nestled within this tech revolution lies an opportunity for sharp investors to invest in a remarkable company poised to dominate its corner of this burgeoning market.

And thanks to The Motley Fool, the full narrative of this extraordinary tech trend has been compiled into an exclusive report, designed to arm you with the insights needed to make informed investment decisions.

Access the report and unlock the secrets of tomorrow's tech revolution – before the rest of the world catches on.

NIL To 100 Real Quick

To National Collegiate Athletics Association (NCAA) athletes, for many years, “NIL” meant, well, nil.

The nonprofit regulator prohibited college athletes from profiting off their name, image, or likeness (NIL) for much of its 100+ year history. But that changed in 2021, when a landmark decision reversed this controversial NCAA policy, a paradigm shift for the landscape of sports in the U.S.

Now a new class of professional athletes has cropped up — and with them a plethora of surprising ways to profit on this emerging industry.

EA-ting Good

The new NCAA rules still prohibit colleges from paying their athletes. But they do allow athletes to find other ways to monetize their talent and fame, such as inking endorsement deals.

And that might just be the beginning. At the top of this month, a new Virginia state law allowing schools to pay players for their NIL rights went into effect. Despite the NCAA prohibition, a number of Virginia colleges and universities plan to take advantage of the new rules at the state level.

But how does this impact markets? You can’t buy shares in Old Dominion University. However, there are several potential ways for investors to play the change in NCAA rules, indirectly or otherwise.

For starters, yesterday, Electronic Arts (EA) released EA Sports College Football 25, arguably the most anticipated sports video game in history.

Unlike, say, an annual Madden NFL release — typically a non-event for sports fans and gamers alike — College Football 25 marks a major shift for both sports gaming and the wider industry. It is the first NCAA football game in more than a decade, and the first in history to use athletes’ names and likeness, thanks to the change in NIL regulations.

Universities across the country are celebrating its release with launch parties — and analysts are joining the party too. In recent days, Stifel Nicolaus and Oppenheimer raised their price targets for Electronic Arts to $165 and $170, respectively.

Following the upgrades, the stock notched a fresh 52-week high on Thursday. But on Friday, it closed just above $140, still well below the targets.

Branding Exercise

In addition to EA, the NIL change could impact athleticwear makers, sports equipment companies, and any other brands signing deals with these young celebrities.

For example, LSU gymnast Olivia Dunne — the most-followed college athlete across social media platforms like Instagram (META) and TikTok — landed a major multi-year deal with OFFLINE-parent American Eagle (AEO), as have several other popular college athletes.

At least one market observer has attributed American Eagle’s explosive popularity with younger generations to its proactive NIL strategy. (Piper Sandler found the apparel brand was the second favorite among U.S. teens in 2023.)

Athleticwear giant Nike (NKE) — perhaps not coincidentally, American teenagers’ first favorite apparel brand, per the same survey — has also had a go-ahead response to this industry-wide sea change.

Nike leveraged a 2-year NIL deal with Iowa basketball superstar Caitlin Clark into an impressive 8-year contract after Clark went pro, which some have pointed to as a pivotal part of its turnaround strategy. The sportswear giant has reported softening demand and slipping digital sales in its latest earnings, thanks in part to its signature athletes facing controversy or aging out of relevance. But Nike has signed a multitude of NIL deals in recent months, which may be a step toward better footing.

Investors may be wise to monitor future deals by athleticwear companies, as well as out-of-left-field names like Outback Steakhouse (BLMN), which is endorsed by Kansas basketball center Hunter Dickinson and Michigan women’s star Naz Hillmon. These contracts might not translate 1:1 to a rise in share price, but they could help brands gain a stronger foothold with younger generations, potentially improving long-term popularity and growth.

TOGETHER WITH THE MOTLEY FOOL

AI-ighty Potential

Dubbed the "the rocket fuel of AI" by Wired, this groundbreaking innovation has sparked fervent excitement across Wall Street. And with projections soaring to a potential market cap of $17 trillion – equivalent to 9 Amazons – the magnitude of its impact cannot be overstated.

But here's the real deal: nestled within this tech revolution lies an opportunity for sharp investors to invest in a remarkable company poised to dominate its corner of this burgeoning market.

And thanks to The Motley Fool, the full narrative of this extraordinary tech trend has been compiled into an exclusive report, designed to arm you with the insights needed to make informed investment decisions.

Access the report and unlock the secrets of tomorrow's tech revolution – before the rest of the world catches on.

In-Vestible

There’s one more surprising way to gain direct exposure to the NIL explosion: investing in the players themselves.

No, we don’t mean betting a small fortune on your Fantasy Football season. A company called Vestible has created a unique alternative investment vehicle, allowing investors to literally buy shares of a college athlete’s future success.

For example, former Ohio State linebacker and current Denver Bronco Baron Browning is selling 1% of his future earnings, divided into 60,000 to 100,000 shares, priced at $10 per share. This year, the totality of shares would amount to just $31,000. But it’s an investment, and should he play well enough to earn a bigger contract in years to come, it could pay off big time.

Dividends are distributed monthly, but Vestible is working to make that real-time, paying out investors as each NFL game check is cashed. The company has been granted qualification by the SEC and FINRA.

The rise of NIL isn’t just a boon for budding superstars. It just might benefit investors, too, provided they know where to look.