Allbirds' AI Dream Lasted Only One Day: After a 582% Surge on Wednesday, It Crashed 36% in a Single Day on Thursday

Allbirds' "AI transformation" rally came quickly and went just as fast. On Thursday, April 16, "the Footloose of Silicon Valley," Allbirds, plunged nearly 36%, with further declines exceeding 6% after hours. This followed a skyrocketing surge of over 582% on Wednesday due to its pivot to artificial intelligence infrastructure. As reported by Wallstreetcn, Allbirds, a company founded on wool sneakers, announced it would change its name to NewBird AI. Prior to this, analysts were generally skeptical of the surge, viewing it merely as an emotional release amid the AI frenzy. Adam Sarhan, CEO of 50 Park Investments, warned that such rallies "often end in tears," pointing out that the market is still embracing the company despite it having no actual AI advantages, indicating that "the AI bubble is heating up." Analysts: No AI Substance; The Surge Was Just a "Hail Mary" On April 15, Allbirds announced it would abandon its core footwear business to pivot to AI computing services and planned to rebrand as "NewBird AI." Following the announcement, the company's stock skyrocketed approximately 580% in a single day, surging from under $3 to around $17, while its market cap exploded from roughly $21 million to about $148 million. This scene once again sparked high market attention to "AI concept speculation." The reaction to this transformation announcement was polarized. Capital rushed in to push up the stock price, but during a CNBC program, well-known host Jim Cramer stated bluntly: This is simply absurd. William Blair analyst Dylan Carden characterized Wednesday's surge as "a hail mary from every angle," attributing it to "a combination of scarce float, automated momentum trading, and out-of-control speculation." He stated that continuing to track the stock has no substantial meaning and announced he is dropping coverage. Allbirds got its start in 2015 focusing on eco-friendly shoes made from Merino wool. By the time it went public in 2021, its valuation had reached as high as $4 billion. However, within just a few years, intensified competition led to sales being cut in half. Allbirds' stock has cumulatively lost about 96% of its market value. This sudden announcement to pivot to AI infrastructure was interpreted by the market as a survival-driven brand reshaping. AI Concepts Become the "Traffic Code" as Small-Cap Companies Compete to Follow Suit Allbirds is not the only company this week to boost its stock price using the AI transformation concept. Social media company Myseum announced it would rename itself Myseum.AI and shift its business focus to AI. On Thursday, it surged over 250% at one point, yet even so, its total market capitalization after Thursday's close was only $10 million. Adam Sarhan stated: With both significant pullback risks and short-squeeze pressures present, there is no reason to participate in such trades. Similar rallies have appeared on Wall Street before. Besides "retail short squeeze" events like GameStop and AMC during the pandemic, companies such as CaliberCos and Eightco also saw their stocks surge sharply in the short term after announcing cryptocurrency-related initiatives. For investors, this event suggests that in rallies driven by AI concepts, short-term volatility dominated by emotion often lacks fundamental support, and the cost of entering via the Herding Effect can be extremely high.