Why Nextdoor Shares Are Up Today: Activist AI Thesis Fuels Rally

Nextdoor Holdings Inc. (NYSE: NXDR) shares are experiencing another significant surge in premarket trading Thursday, building on Wednesday’s extraordinary 49% intraday rally that saw the stock close up approximately 26%. The momentum continues after activist investor Eric Jackson of EMJ Capital published a comprehensive investment thesis calling Nextdoor “the most mispriced Agentic-AI platform of the 2020s.”

Jackson’s bullish stance has ignited intense retail investor interest, with trading volumes running several times above normal levels as speculators respond to his argument that Wall Street fundamentally misunderstands the platform’s AI monetization potential.

Jackson Sees Multi-Billion Dollar AI Revenue Potential by 2029

Eric Jackson’s detailed analysis centers on Nextdoor’s unique verified neighborhood network of over 100 million real households with zero bot accounts, what he calls an “irreplaceable identity graph” for artificial intelligence applications.

Jackson, whose Toronto-based hedge fund EMJ Capital previously drove Opendoor Technologies up over 360% in 2025 after promoting it in June, argues that Wall Street mistakenly values Nextdoor as a traditional local advertising business rather than recognizing its AI potential. He emphasized that this verified user base “took a decade to build” and “couldn’t be replicated with $10 billion and a thousand engineers.”

Jackson’s valuation framework compares Nextdoor to Reddit, suggesting that applying Reddit’s 14.6x forward revenue multiple to Nextdoor’s projected 2026 revenue would yield a fair value of approximately $11 per share, a potential 335% upside from Tuesday’s closing price of $2.01. In his most optimistic “power-law case” scenario, Jackson projects Nextdoor could reach $5.7 billion in high-margin revenue by 2029, potentially valuing the company at $374 per share.

He outlined multiple potential revenue streams beyond traditional advertising, including lead generation for local services and “Opportunity Alerts”—a new AI-powered commerce surface that could transform how neighbors discover and purchase services.

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Mixed Market Reaction as Analysts Question Long-Term AI Monetization Path

Jackson’s investment style has drawn both praise and criticism, with some observers comparing him to meme-stock influencer Keith Gill due to his ability to move markets through public commentary. His track record includes successful calls on Carvana before it rose from single digits to over $450 per share, and Better Home & Finance Holding, which jumped 176% in September after Jackson took a position.

However, critics note that Jackson’s hedge fund holdings feature volatile companies that attract retail attention, and previous picks have given back gains after initial surges.

The market remains divided on whether Jackson’s AI thesis will prove correct. While Nextdoor has achieved positive EBITDA and shown operational improvements under CEO Nirav Tolia, including reduced spam alerts and improved revenue per employee, the company’s revenue growth has been steady but unspectacular at $253.4 million trailing twelve months.

The platform faces intense competition from other social networks for local advertising dollars, and whether AI applications will indeed make Nextdoor’s verified household data “increasingly valuable,” as Jackson predicts, remains an open question that will be tested in the months ahead.

Shares Hit $2.92 in Premarket After Massive Volume-Driven Breakout

As of 6:22 AM EST Thursday, Nextdoor shares were trading at $2.92 in premarket, up $0.37 or 14.51% from Wednesday’s close of $2.53. This follows Wednesday’s remarkable session where the stock opened at $2.70 and surged as high as $2.99, a gain of nearly 49% intraday, before settling at $2.53, still up 25.87% for the day.

The Wednesday trading volume of 56,050,279 shares represented nearly 29 times the average daily volume of 1,926,909 shares, indicating massive retail participation.

The stock’s 52-week range now spans from $1.32 to $2.99, with the current market capitalization standing at approximately $992 million. Despite the recent surge, Nextdoor remains unprofitable with a negative profit margin of 24.58% and diluted EPS of -$0.16.

However, the company maintains a strong balance sheet with $403.32 million in total cash and relatively low debt, with a total debt-to-equity ratio of just 8.02%. Analyst consensus remains at “Hold” with an average price target of $2.34, though the most recent rating from Citigroup on November 10 lowered its target from $2.40 to $2.20.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.