TLDR
- Opendoor stock jumped 10x from $0.50 to nearly $10 after appointing new Shopify CEO Kaz Nejatian
- Company plans AI pivot in real estate but still posts terrible 8.2% gross margins on $1.6B revenue
- Jim Cramer calls it a meme stock and warns investors to avoid the $7 billion valuation
- Previous CEO departure raised questions about company leadership and stock manipulation
- Bulls betting on AI disruption in real estate but profitability remains elusive
Opendoor Technologies stock has delivered one of 2025’s wildest comeback stories. The real estate platform crashed to $0.50 earlier this year, down over 95% from peak levels.
Then everything changed. Shares rocketed more than 10 times higher to nearly $10 per share. The catalyst? New leadership and artificial intelligence promises.
Last week Opendoor named Kaz Nejatian as CEO. He joins from Shopify where he served as chief operating officer for six years. At Shopify, Nejatian helped drive innovation across e-commerce and payments.
Now he wants to revolutionize real estate using AI technology.
The AI Strategy Shift
Opendoor’s original model involved making cash offers to home sellers. The company would buy properties and resell them for a profit. This iBuying approach proved capital intensive with thin margins.
Nejatian plans to expand beyond home flipping. He wants to create AI-powered tools for real estate agents, buyers, and sellers. The goal is becoming a software partner rather than just a property flipper.
This pivot comes as Opendoor struggles with profitability. Last quarter brought $1.6 billion revenue but only $128 million gross profit. That 8.2% margin trails most grocery stores.
The company has never consistently turned a profit despite years of trying. Its business model requires holding expensive home inventory on the balance sheet.
Cramer’s Meme Stock Warning
CNBC’s Jim Cramer isn’t buying the turnaround story. When a caller asked about Opendoor as a speculative play, Cramer was direct.
“We don’t want to be in a meme stock,” he said.
Cramer previously criticized the company in August. He called Opendoor a meme stock and questioned circumstances around leadership changes. The host suggested some market activity appeared manipulative.
His skepticism focuses on valuation concerns. Opendoor now trades at a $7 billion market cap despite ongoing losses and an unproven AI strategy.
For context, established real estate giant Zillow has an $18 billion valuation. Zillow actually captures industry profits through its popular property portal.
Market Reality Check
The real estate opportunity remains massive. Around 4 million existing homes sell annually in the United States. Before interest rates rose, that number reached 6 million.
Trillions of dollars change hands in real estate transactions each year. If Opendoor captures even a small slice through AI tools, returns could be substantial.
But execution remains the key question. Many companies have tried disrupting residential real estate with limited success.
Opendoor’s new CEO faces pressure to prove his AI vision can work in practice. The company needs to show it can generate sustainable profits from this pivot.
Recent trading shows Opendoor stock remains highly volatile with massive daily volume swings.
