Allbirds Stock Soared This Week. What Does It Mean That It Hasn’t Fallen All the Way Back?

• The S&P 500 on Friday topped 7100 for the first time as a temporary reopening of the Strait of Hormuz revived animal spirits.

• Market observers, lay and professional, appear to think the speedy turnaround in U.S. stocks, and the revival of left-for-dead plays like Allbirds, is “not unusual.”

It can be hard to know when what goes up will come down.

Take Allbirds (BIRD), shares of which took flight—surging almost 880% at this week’s peaks—after the flagging shoe brand announced it would step into the artificial intelligence space. Or, perhaps, a micro-cap called Myseum (MYSE), which pulled in $550 in revenue last year, this week also pivoted into AI and watched its stock surge. Both stocks have pulled back from their highs, but they remain well above where they started, lifted in part by an all-around positive mood: The S&P 500 on Friday topped 7,100 for the first time in history, marking a quick and dramatic turnaround over the past couple weeks, as investors cheered the latest positive Iran war headlines.

Animal spirits—the positive kind— are back, and investors are enjoying themselves. “Pinging allbirds, can’t wait for my shoes to suggest better walking strategies,” one X user remarked. On Reddit’s roiling wallstreetbets forum, participants traded quips like “Breaking: Iran rebrands as AI-ran” and “AI BUBBLE’S BACK ON THE MENU BOYS”.

If investors had taken a cue from the market experts who remarked in March that U.S. stocks looked cheap, they would have made a near 15% return—just a few percentage points shy of the S&P 500’s gains for all of 2025.

It’s possible that this episode has lost some steam. Vanda Research’s Viraj Patel in emailed comments said retail investors took profits on Allbirds yesterday; he reported “strong buying” elsewhere, such as in shares of companies like Netflix (NFLX) and Tesla (TSLA). But there may also be a sustained appetite for quick action—whether you view that at as a willingness to play memes, a risky bubble on its way to popping, or a reflection of the health of the AI trade.

“The market is screaming for more AI,” Josh Young of Bison Insights wrote in a Friday note. But “Sharp rallies off lows tend to see laggards perform the best, and nothing had lagged going into the March lows as much as Tech,” DataTrek’s Nicholas Colas and Jessica Rabe wrote earlier this week. “The group’s recovery is more a testament to improving investor sentiment than a sudden rethink of the ‘AI trade’.” Some market watchers have said that see the setup for investors as fraught, with too many risks—including war, inflation and other economic questions—to get comfortable. But others see signs of healing after weeks of Iran-related concern.

“As you move through crises, as you move through these kinds of events, what you tend to see is the market worry a lot and then the first stage of relief comes mostly from removing the weight that people put on the very bad tails that are out there,” Goldman Sachs Research’s Dominic Wilson said in a recent episode of the firm’s Exchanges podcast. “Seeing a recovery period where there’s a lot of things unresolved in of itself is not unusual,” Wilson said, saying that in some prior cases—such as the Covid pandemic and then tariffs—markets recovered before the crisis had passed.

Others simply see history repeating itself. “This AllBirds story of a struggling consumer brand with a recognizable name using a pubic shell to access a hot thematic narrative…the business doesn’t matter, only the association does; in the ’90s it was internet commerce; now it’s GPU infrastructure,” Liz Ann Sonders, chief investment strategist at the Schwab Center for Financial Research, posted on social media on Wednesday.

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