Allbirds stock sees wild surge of more than 875% on pivot from sneakers to AI

• Allbirds is trading shoes for GPUs and the stock is soaring.
• The sneaker company announced it's pivoting to AI, rebranding itself as NewBird AI.
• The company will focus on providing GPU compute-as-a-service.

What's All is New.

Allbirds, once the go-to shoemaker for finance and tech bros coast to coast, is transforming into NewBird AI, and its stock is seeing a wild rally on the pivot.

Shares exploded higher by as much as 876% to $24.31 after closing at $2.49 on Tuesday.

The sneaker company announced it entered into an agreement with an institutional investor for a $50 million convertible financing facility, which it will use to buy "high-performance GPU assets" as part of a pivot into AI computing infrastructure.

Allbirds announced a deal at the end of March to sell its shoe business for $39 million to American Exchange Group, which owns brands like Aerosoles, Ed Hardy, and Mudd.

The new company cited a "long-term vision to become a fully integrated GPU-as-a-Service (GPUaaS) and AI-native cloud solutions provider."

The company joins a long list of firms stretching back to the early 2000s internet boom that have pivoted to initiatives far outside their core business in a bid to win back investors.

In 2017, the Long Island Iced Tea announced a pivot to become Long Blockchain Corp. The stock surged almost 500% on the news. More recently, media company BuzzFeed pivoted to AI in 2023, sparking a huge stock rally, and other firms in the last year, including a karaoke machine maker, have said they're shifting gears to AI.

Allbirds' statement framed the pivot as the company stepping up to meet a growing gap in the supply of critical AI computing power.

"The rise of AI development and adoption has created unprecedented structural demand for specialized, high-performance compute that the market is struggling to meet," the announcement read.

"NewBird AI is being built to help close that gap. The Company will initially seek to acquire high-performance, low-latency AI compute hardware and provide access under long-term lease arrangements, meeting customer demand that spot markets and hyperscalers are unable to reliably service."

The sharp pivot comes after Allbirds' stock valuation has plunged since going public in 2021. The Allbirds IPO raised roughly $348 million with the stock priced $15 per share.

Allbirds shoes were once a favorite of Wall Street traders, Silicon Valley tech workers, and even former president Barack Obama.

Yet the company, which focused on sustainability and comfort, has seen deepening losses since going public, with revenue declining in each quarter since 2022.

Correction: April 15 — An earlier version of this story misstated the dollar amount Allbirds was sold for. The figure has been updated.