A short squeeze might sound like Wall Street jargon, but it is pretty simple. When a lot of traders bet against a stock and it suddenly shoots up, they rush to buy it back to cut losses. That panic buying pushes the price even higher – sometimes in a very short time.
That’s where Allbirds (BIRD) came into picture. What started as a clean, eco-friendly shoe brand built on wool sneakers and Silicon Valley hype has had a rough ride since its 2021 IPO. Losses piled up, and the stock spent years sliding downhill.
More Top Stocks Daily: Go behind Wall Street’s hottest headlines with Barchart’s Active Investor newsletter.
But things took a sharp turn last week. Allbirds said it is pivoting into AI infrastructure. Yes, from sneakers to AI Infrastructure! The move came right after it sold its shoe tech IP for $39 million. Investors did not overthink it, and just hit “Buy.” The stock has already skyrocketed.
Looking ahead, the timing gets even more interesting. The company is anticipated to drop its Q1 numbers for fiscal 2026 in next month, with modest revenue but ongoing losses expected. Meanwhile, short interest sits around 17% of the float, indicating a meaningful level of bearish positioning.
This creates a notable situation – a high-profile strategic pivot, a heavily shorted stock, and a key earnings event approaching. If momentum holds, or surprises pop, short sellers could come under pressure. So, are we heading toward a potential short squeeze?
About Allbirds Stock
Allbirds is a San Francisco-based lifestyle brand with roots in New Zealand, built on a pretty simple idea of making comfortable shoes without harming the planet. It started in 2007 when former footballer Tim Brown turned a wool sneaker concept into something real, later teaming up with renewables expert Joey Zwillinger.
The company launched its first product, the Wool Runner, in 2016 and quickly caught attention for its clean design and eco-friendly materials. Think merino wool, tree fibers, and even sugarcane-based soles. What began as a single shoe soon scaled into millions of pairs sold, riding strong demand from sustainability-focused consumers. Backed by celebrity buzz – from Oprah Winfrey to Emma Watson – Allbirds became a Silicon Valley favorite. Its market capitalization currently stands at $74 million.
The company has had a wild ride in the marketl, full of sharp turns and sudden bursts of speed. It went public in 2021 and the early momentum did not stick around. As investors moved away from growth-heavy and e-commerce names, BIRD stock also steadily lost ground.
Then came a sudden plot twist this month. On April 15, the stock jumped 582.3% in a single session, after the company revealed its pivot into AI infrastructure and rebranded as NewBird AI. That move sparked a buying frenzy that pushed the stock far beyond typical technical levels, with its 14-day RSI shooting into the mid-90s, a sign of extremely overbought conditions.
In short, the stock has gone from forgotten to red-hot almost overnight, and not everyone’s convinced it’s grounded in fundamentals.
BIRD stock rose and hit a high of $24.31, but that momentum did not hold, now down 65% from that peak. But still the stock is now up 105.6% year-to-date (YTD), nearly 169.3% in the past month.
Technically, things have cooled but not collapsed. The 14-day RSI has eased to 57.96, suggesting the stock is no longer in extreme territory. Plus, the MACD oscillator is flashing a positive signal, with the MACD line crossing above the signal line and the histogram staying in positive territory, pointing to strengthening upward momentum.
www.barchart.com Allbirds’ Shift From Sneakers to AI and Forward Outlook
Allbirds’ core business had been under pressure for a while, so the shift from sneakers to AI did not come out of nowhere. Perhaps it was pushed into it. Revenue kept slipping, there has not been real quarterly growth in over three years, and losses were accumulating.
Revenue for fiscal 2025 declined 19.7% annually to $152.5 million, while operations came in at -$80 million. Meanwhile, net loss for the year amounted to $77.3 million or $9.47 per share. Looking at the balance sheet, cash and cash equivalents slipped by 60% year-over-year (YOY) to $26.7 million, with long-term debt coming in at $17.4 million.
Eventually, the move started looking necessary.
The company made a clean break. It struck a deal with American Exchange Group to sell its brand and key assets for about $39 million. The transaction, expected to close in Q2 of fiscal 2026, effectively hands over the footwear business, letting American Exchange carry the legacy forward.
Now, the company is rewriting its identity as ‘NewBird AI,’ and the timing is not random. AI demand is soaring, but supply is tight. GPUs are hard to get, and data center capacity is already stretched. That gap is exactly what NewBird wants to tap into.
The plan is to start by buying high-performance GPUs, lease that power to customers, and slowly build a full-scale AI cloud platform. It’s a massive leap from sneakers to servers, and while the opportunity looks real, the risks are not small either.
Allbirds is set to drop its official Q1 earnings sometime in the first two weeks of May, and it’s already given the market a quick preview. The company expects to bring in about $22.3 million in revenue, with adjusted EBITDA around $16.1 million. Yet, it is still anticipating a net loss of roughly $19.6 million, plus or minus $3 million.
The numbers are not exactly screaming profitability, but with everything changing around the business right now, investors seem more focused on what comes next than what just happened.
What Do Analysts Expect for Allbirds Stock?
Even with all the recent AI excitement around Allbirds, all of the Street is not exactly jumping in with both feet on the stock. Analysts have quietly dialed back their, with the stock slipping from a “Moderate Buy” rating three months back to a unanimous “Hold” from both analysts covering the stock. That tells us that the AI excitement has not fully translated into confidence.
Meanwhile, the average and the Street-high price target sit at $14, suggesting 66% rebound potential, if the story actually holds up this time.
www.barchart.com 
www.barchart.com On the date of publication, Sristi Suman Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart
Is a Giant Short Squeeze in Allbirds Stock Brewing Before May? 2 Tech Stock Analysts Believe Can Bounce 70% or More Over the Next 12 Months TSLA Stock: 4 Key Things to Watch When Tesla Reports Q1 Earnings Should You Buy AMD Stock Before Earnings on May 5? GF Securities Says Yes.