Struggling Nike Competitor Shifts Strategy, Sparks 400% Stock Surge as Investors Reap Rewards

In a surprising turn of events, former footwear innovator Allbirds has transitioned into the artificial intelligence sector following its acquisition by the American Exchange Group. This strategic shift has proven highly profitable, as reflected by a substantial boost in the company’s stock value.

Previously recognized as a trailblazer in eco-friendly fashion, the company—now operating under the name ‘NewBird AI’—has seen its shares skyrocket by over 350% following the announcement of its new direction.

The rebranded company cites a surge in the demand for AI technology as the driving force behind its strategic change, aiming to leverage this trend after a modest purchase deal just weeks ago.

Founded in 2015 with strong backing from Silicon Valley, Allbirds experienced its downturn amidst growing challenges in the broader sneaker industry.

The sale of Allbirds for a mere $39 million marked a dramatic decline from its $2 billion valuation just four years earlier, a period when it was deemed a formidable contender to giants like Nike.

Even industry giant Nike has been struggling, with sales plunging and shares now sitting at a 15-year low after losing around 75 percent of their value since peaking in 2021. 

Allbirds’ products were not designed for performance like Nike and Adidas but found their footing with tech workers and millennials who wanted a shoe that sat between business and casual. 

The company, founded in New Zealand, has now shut all US stores after closing nine last year and 15 in 2024. At its peak, Allbirds had 45 stores in the US and 60 worldwide. It will now continue as an online-only retailer.

In 2021, Allbirds released its eco-conscious ‘Natural Run’ performance apparel line 

Allbirds closed several storefronts in 2024, later reporting a decline in earnings

Revenue dropped to just $33 million in the third quarter of 2025 – down $10 million year-on-year – as the brand blamed ‘structural changes’ in its business.

Joe Vernachio, a co-CEO, said the company is ‘incredibly thankful’ to its employees despite challenges faced by the brand.

‘Over the past decade, Allbirds has evolved into a lifestyle footwear brand known for modern design, innovative materials and unparalleled comfort,’ he added. 

Retail expert Hitha Herzog previously told the Daily Mail that Albirds faces a series of problems.

‘The product is not great,’ Herzog said. ‘Its design is not exciting, the color ways are muted and boring, and their performance shoes are subpar compared to their competition.’

Footwear remains available for purchase on the company’s website, including their recent monochromatic collaboration with Pantone. Some social media users theorized about the reasoning behind Allbirds’ declining sales.  

‘I bought a pair back in 2021 for a Disney trip, really liked them,’ one Reddit user said. 

‘They felt well-made and pretty durable. My wife bought me another pair last year and within a month, there was a hole on the top from my big toe. Sucks to see them go downhill so fast.’

Allbirds is known for creating minimalist sneakers from recycled and natural materials

Allbirds was founded by New Zealander Tim Brown, left, and engineer Joey Zwillinger, a renewables expert

Michael Jordan’s Air Jordans helped make Nike the world’s largest sports brand, but the company has been struggling in recent years

Meanwhile, Nike’s revenue has been dropping consistently since early 2024, while footwear companies Adidas and Hoka have seen profits soar.

Shares are at an 11-year low, with the company losing around 75 percent of its value since shares peaked in 2021. 

This could be attributed to Nike’s more ‘woke’ image shift, its retreat from major retail partners in favor of direct-to-consumer selling and a deepening sales slump in China.

‘Nike’s results are somewhat better than anticipated, though they show that the brand is having a very uneven recovery and has a lot of work to do to get back on the front foot,’ retail analyst Neil Saunders told the Daily Mail.