Sign on the facade of the Allbirds shoe company, Walnut Creek, California, August 25, 2025.
Smith Collection | Archive photos | Getty Images
Retailers rushed in All birds After the troubled shoe maker slapped the “artificial intelligence” label on its business, as market history shows, a constellation rarely ends well once the initial hype dies down.
The company’s shares shot up more than 800% at one point on Wednesday after the company laid out shocking plans to rebrand itself as NewBird AI and shift to computing infrastructure. The surge added well over $100 million to its market cap, which had been just $21 million a day earlier.
Retail investors quickly embraced the new narrative, data from Vanda Research showed. Net purchases reached a record $5.2 million in a single day, even exceeding demand during the company’s 2021 IPO.
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Allbirds year to date
This surge in speculative buying reflects a general return of animal sentiment among small traders as the broader stock market rebounded sharply from losses caused by geopolitical risks. The S&P 500 has completely erased its losses caused by the Iran war and hit a new all-time high on Thursday.
“The market doesn’t value risk. It’s a pricing narrative. It values the word ‘AI’ the same way it used to value the word ‘blockchain’ and the suffix ‘.com’ before it,” Mark Malek, CIO at Siebert Financial, said in a note. “This is not an analysis. This is a pattern matching with a catchphrase from investors who have watched AI-adjacent stocks go parabolic and don’t want to miss the next leg. The signal is not subtle.”
The rise of commission-free trading platforms has helped create a new generation of retail investors, lowering the cost of speculation and accelerating the spread of so-called meme trades. This dynamic was on full display in 2021 GameStop episode when coordinated purchases by individual traders drove the stock higher and inflicted heavy losses on short sellers, cementing a playbook that keeps cropping up in various forms.
From karaoke to AI
A recent example highlights how these episodes can veer into the surreal. Algorithm Holdings – a little-known karaoke machine and niche consumer electronics maker – stunned markets when it announced a move to an AI-driven logistics and computing platform.
“This narrative shift was enough to trigger a significant increase in retail flows, with buying continuing beyond the initial headline and helping the stock register a second advance,” Vanda Research said in a note to Algorhythm.
The enthusiasm proved fleeting, however, as shares have since rounded out and are now back around $1, underscoring how quickly such narrative gains can evaporate.
Allbirds’ rally quickly showed signs of strain, with the stock falling more than 20% on Thursday as momentum cooled.
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