The Dow Jones Industrial Average (DJINDICES:^DJI) was enjoying a strong day on Friday, up 0.44% by 1:40 p.m. EST. President Donald Trump said in a tweet that a formal signing for phase one of the trade deal between the U.S. and China was being arranged.

Dragging down the Dow was Nike (NYSE:NKE), which reported exceptional quarterly results but was unable to rally, perhaps due to an elevated valuation. Meanwhile, shares of Apple (NASDAQ:AAPL) edged up as an analyst predicted rapid growth for the company's AirPods next year.

Nike's earnings beat not good enough

Footwear giant Nike easily beat analyst estimates across the board when it reported its fiscal second-quarter results on Thursday evening. But it wasn't enough to keep the stock moving higher, with shares down 1.3% on Friday.

Revenue was up 10% year over year to $10.3 billion, ahead of the average analyst estimate by $240 million. Notably, the Jordan brand hit $1 billion on a wholesale equivalent basis during the quarter for the first time.

The Jordan brand logo.

Image source: Nike.

Earnings per share came in at $0.70, up 35% year over year and $0.12 higher than analysts were expecting. Revenue growth, gross margin expansion, operating expense leverage, a lower tax rate, and a reduced share count thanks to share buybacks all contributed to the per-share earnings growth.

On an absolute basis, Nike's results were impressive. But relative to the increasingly lofty expectations built into the stock price, the picture is less clear. Shares of Nike have nearly doubled over the past three years, and they're up around 35% in 2019. The stock now trades for roughly 33 times the average analyst estimate for fiscal 2020 earnings.

The market could be second-guessing whether Nike really deserves such a premium valuation. The company is certainly doing well, and its brand remains extremely strong. But the stock price might have gotten out ahead of the fundamentals.

Apple's AirPods business could explode next year

While Apple's holiday quarter might be at risk as iPhone sales in China collapse, a bright spot for the company has been its wireless AirPods. Apple reportedly boosted production of the popular gadget last month as demand, particularly for the high-end Pro version, exceeded initial expectations.

Bernstein analyst Toni Sacconaghi expects AirPods revenue to hit $6 billion this year, but 2020 will be even better. The analyst predicted on Friday that AirPods would generate around $15 billion in revenue for the tech giant in 2020.

While Sacconaghi sees a bright year for AirPods ahead, he also expects growth to decelerate substantially in 2021 or 2022. As Apple runs out of iPhone users who haven't yet bought AirPods, growing the business will become harder. Sacconaghi compared AirPods to the iPad, which has struggled with growth in recent years as the market has become saturated.

Even if AirPods revenue does hit $15 billion next year, the product will still be small potatoes compared to the iPhone. Apple generated $142.4 billion of revenue from its iconic smartphone in fiscal 2019.

Shares of Apple were up 0.3% Friday, losing out a bit to the broader market. The stock has soared around 78% so far this year.