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Allbirds (BIRD) stock veered nearly 30% lower on Thursday afternoon, sharply reversing from a nearly 600% gain on Wednesday following the company's announcement that it's switching from being a sustainable sneaker business to an artificial intelligence company.

The stock fell to $12 per share after jumping as high as $23 on Thursday. Still, it's a far cry from its price of less than $3 just days ago. The company's market cap spiked to $159 million on Wednesday, compared to $21.7 million at Tuesday's close.

The company plans to change its name to NewBird AI and raise $50 million, with the funds expected to close during the second quarter of 2026.

Read more about Allbirds' stock moves and today's market action.

In late March, Allbirds sold its footwear assets to American Exchange Group, the company behind Aerosoles and Ed Hardy, for $39 million.

NewBird AI will aim to "acquire high-performance, low-latency AI compute hardware" and "provide access under long-term lease arrangements, meeting customer demand that spot markets and hyperscalers are unable to reliably service," the company said in a press release.

Allbirds launched 10 years ago and went public in 2021. It was known for its Wool Runner shoe, but investors struggled to stay optimistic on the stock as customers gravitated toward Hoka (DECK) and On (ONON) shoes.

Essentially, the company is seeking to fill what it views as a gap in the AI market by providing high-performance AI chips and data center space.

"The rise of AI development and adoption has created unprecedented structural demand for specialized, high-performance compute that the market is struggling to meet," the company said in the release.

"GPU procurement lead times are increasing for high-end hardware, North American data center vacancy rates have reached historic lows, and market-wide compute capacity coming online through mid-2026 is already fully committed," the company added. "The result is a market where enterprises, AI developers, and research organizations are unable to secure the compute resources they need to build, train and run AI at scale."

The unlikely pivot from sustainable shoes to artificial intelligence comes as the valuations of other AI players, such as Nvidia (NVDA), Meta (META), Google (GOOG), and SanDisk (SNDK), have soared over the past year.

There's precedent for an unusual company pivot. For instance, in 2017, as cryptocurrency interest hit the Street, Long Island Iced Tea rebranded as Long Blockchain Corp., saying it was "shifting its primary corporate focus towards the exploration of and investment in opportunities that leverage the benefits of blockchain technology." In 2018, the Nasdaq delisted the company.

Brooke DiPalma is a reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.

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