The Gap, Inc. (GAP): A Bull Case Theory
We came across a bullish thesis on The Gap, Inc. on TrendInvest’s Substack by Makios. In this article, we will summarize the bulls’ thesis on GAP. The Gap, Inc.'s share was trading at $22.01 as of August 29th. GAP’s trailing and forward P/E were 9.49 and 10.00 respectively according to Yahoo Finance.
Pixabay/Public Domain
Gap’s latest “Better in Denim” campaign, launched on Tuesday, has quickly gone viral across Instagram, TikTok, and YouTube, breaking the brand’s engagement records and marking its most successful ad to date. Featuring KATSEYE performing to Kelis’s 2003 hit Milkshake, choreographed by Robbie Blue, the campaign leverages early-2000s nostalgia and resonates strongly with social media audiences. The ad has already surpassed 20 million views on Instagram within days, sparking widespread conversation around inclusivity and cultural relevance in fashion advertising, in stark contrast to American Eagle Outfitters’ recent denim campaign featuring Sydney Sweeney.
Social media reception has been overwhelmingly positive, with fans actively sharing content and engaging with Gap’s messaging, signaling strong consumer connection. Analysts like Casey Lewis note that the 2025 back-to-school season is dominated by denim, with high consumer demand for multiple pairs of jeans, especially low-rise baggy styles, reflecting a broader resurgence of the category. Google Trends data and social media traction suggest that denim is outperforming other casual wear segments, indicating favorable market dynamics for Gap.
While the viral success of the campaign is an encouraging signal for brand engagement, its ultimate impact on foot traffic and sales will require ongoing monitoring to determine whether the trend translates into sustained revenue growth. Overall, Gap has successfully combined cultural relevance, nostalgia, and social engagement to position itself at the forefront of the denim resurgence, creating a potential catalyst for both consumer demand and broader brand momentum.
Previously we covered a bullish thesis on Urban Outfitters (URBN) by Value Don’t Lie in September 2024, which highlighted the company’s strong fundamentals, effective capital allocation, and growth of its Anthropologie and Free People brands. The stock has appreciated approximately 89.30% since our coverage as the thesis played out. The thesis still stands, while Makios shares a similar perspective but emphasizes Gap’s viral “Better in Denim” campaign and denim resurgence as key growth drivers.
The Gap, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held GAP at the end of the first quarter which was 39 in the previous quarter. While we acknowledge the potential of GAP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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