Allbirds Popped 800% Intraday on an AI Pivot. Is This the Next GameStop?

It was quite the shocker to see shares of former Silicon Valley-loved footwear firm Allbirds (NASDAQ:BIRD) skyrocketing as much as 800% or so at its high point on Wednesday before closing quite a bit lower. Undoubtedly, you just had to know that there was some kind of AI pivot unfolding to produce such an obscene reaction to the shares of a company that actually sold off its footwear business on the cheap just a few weeks ago.

Of course, if you haven’t been keeping up with the apparel retailer, you probably missed that move as well. Either way, such explosive share price moves are so dangerous to chase, especially as the meme rally crowd looks to punch their ticket.

With echoes of the dot-com bust or the crypto boom (remember when Long Island Iced Tea changed its name to Long Blockchain Corp, inspiring a meteoric single-day rise in the shares?) now working their way into the ongoing AI revolution, there are bound to be more “AI bubble” talks heating up again, even as promising new technologies, like Anthropic’s Claude Mythos, Claude Cowork, and Claude Code, continue to drive home the point that there’s serious transformative potential to be had in the boom. 

NewBird AI: From shoes to AI.

In any case, Allbirds is now known as NewBird AI (a pretty cool name, I must admit) and is focusing its efforts on a GPU-as-a-Service business model with $50 million in convertible financing. It’s amusing, unexpected, and maybe even a bit absurd. But the move has garnered the attention of Wall Street and perhaps beyond.

While there’s no question that the business of renting out AI compute is more lucrative than wool sneakers that have since suffered a fall from grace, investors must ask themselves if the barriers to entry into the AI compute market are really low enough such that an apparel company could break into the space and earn enough confidence (at least in the initial stages) of various investors.

After the insane 800% pop, shares have since come in quite a bit. The stock is now hovering just below $11 per share after shedding 36% on Thursday’s session. Indeed, the options market is going a bit nuts over the sudden move. And while meme traders might wish to buy bearish put options as the pullback continues, I’d argue that the stock could go either way, especially if meme traders were to give some of the shorts a squeeze.

What a GameStop-esque move that was!

Indeed, after a single-day bounce like one Allbirds stock had on Wednesday, some might view the expensive puts as easy money, so to speak. Personally, though, I wouldn’t dare bet against the stock either way, as volatility moves off the charts like with GameStop (NYSE:GME) way back in 2021.

The GameStop short squeeze, I think, shows that it’s just no longer safe to short stocks anymore. And it doesn’t matter what the company is. As for put options, there’s also considerable risk here, especially as Wednesday’s spike kicks off a tug-of-war of sorts between the bulls and bears. I have no idea where the stock is headed next.

Sure, there will be big wins to be had from making the right bet, but unless you’re looking to roll the dice, I’d not make a move either way. If you are bullish on NewBird AI’s pivot, perhaps waiting for the volatility to settle before punching a ticket would make the most sense.

In any case, of all the shocking pivots, I do think the NewBird’s AI pivot might actually be a success, provided it can hire the right talent to get the job done.

But that doesn’t mean investors will make money by picking up shares at over $10. Whether the name is the new GameStop remains to be seen. Either way, I’m in no rush to place a bet on where the name is headed in the near term.