Allbirds Stock Surges Nearly 400% Following Transition to Artificial Intelligence Focused Entity
Allbirds Abandons Shoe Market, Seeks New Fortune in Artificial Intelligence
Shares of Allbirds soared 373% on 15 April following the company's surprise announcement to exit the shoe market and pivot towards artificial intelligence (AI) instead. The San Francisco-based firm, which has been struggling in the shoe space, plans to rebrand as NewBird AI and focus on providing fully integrated GPU-as-a-Service and AI-native cloud solutions. As part of the transition, Allbirds has secured $50 million in convertible financing to facilitate the switch from shoemaker to AI compute infrastructure.
The company's shares jumped to $13 each, up from under $3 the previous day. NewBird AI will initially seek to acquire high-performance, low-latency AI compute hardware and provide access under long-term lease arrangements to meet customer demand that spot markets and hyperscalers are unable to reliably service.
Allbirds' struggles in the shoe space are well-documented. Founded in 2015 by former professional soccer player Tim Brown and renewable resources expert Joey Zwillinger, the company was once valued at over $4 billion. However, shares of the company have tumbled every year since its 2021 debut, with its market value closing at about $22 million on Tuesday, 14 April.
The company's sales have slumped 50% between 2022 and 2025, down from $298 million to $152 million. In February, Allbirds had closed all of its full-priced stores in the United States. The company had planned to cease operations sometime this month, but the pivot to AI may provide a much-needed lifeline.
| Year | Sales (in millions) |
|---|---|
| 2022 | $298 |
| 2025 | $152 |
| Percentage Change | -50% |
Bloomberg Intelligence analyst Poonam Goyal notes that the move "exits a structurally lower footwear and apparel model for a higher-value compute business, though execution risk remains high." The company has potential to improve its long-term margin profile if the transition is executed well.
This is not the first struggling company to pivot into a buzzy new industry in the hopes of recapturing shareholder value. In 2024, Core Scientific Inc. turned its attention away from Bitcoin mining to AI, and last year a handful of biotechnology companies made the switch into digital assets to varying degrees of success.
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
Investor Takeaway
Investors should consider the potential of Allbirds' pivot to AI-focused entity.
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