Allbirds Stock Surges on AI Hype: Market Boom or Dotcom Bubble?

Shares of Allbirds Inc. Surged more than 700 percent in a single trading session after the company announced it would explore the apply of artificial intelligence in its product design and supply chain operations, according to multiple Czech financial news outlets.

The sharp increase followed a press release issued by the sustainable footwear maker on May 14, 2024, in which it stated it was forming a cross-functional team to evaluate how generative AI tools could improve efficiency in material sourcing, reduce waste in manufacturing and personalize customer recommendations through its digital platforms.

Trading volume spiked to over 45 million shares on the day of the announcement, compared to an average daily volume of approximately 1.2 million shares in the preceding month, according to data from the Nasdaq exchange where Allbirds is listed under the ticker BIRD.

The company’s stock closed at $0.87 on May 13, 2024, and reached an intraday high of $7.20 on May 14 before settling at $6.90 by market close, representing a 693 percent gain from the previous day’s close.

Analysts at JMP Securities noted in a client memo dated May 15 that the rally appeared driven primarily by retail investor enthusiasm rather than fundamental changes in the company’s financial outlook, citing no revisions to revenue forecasts or earnings guidance in the announcement.

Allbirds reported a net loss of $102.3 million in its first quarter 2024 earnings release on May 9, 2024, with revenue declining 12 percent year-over-year to $158.7 million. The company had previously warned investors in its April 2024 shareholder letter that it was implementing cost-cutting measures including workforce reductions and the discontinuation of underperforming product lines.

The sudden market reaction drew comparisons to similar episodes involving other brands that experienced sharp stock movements after referencing AI in public statements, including a 2023 incident involving a Czech footwear retailer whose shares rose over 500 percent after announcing AI-assisted design tools, though that company later disclosed the tools were in early testing phases and not yet deployed at scale.

As of May 16, 2024, Allbirds had not filed any additional disclosures with the Securities and Exchange Commission regarding specific AI partnerships, pilot programs, or expected timelines for implementation of the technologies under review.