The Federal Reserve cut its benchmark interest rate last month, and more cuts are likely coming. The past few years have been tough operating environments for interest rate-sensitive, cyclical industries. One company that encapsulates this struggle is Upstart Holdings (UPST 0.33%), the artificial intelligence (AI) consumer lender. Upstart stock ran up significantly in the months following its December 2020 initial public offering (IPO). The consumer lender benefited from declining interest rates, a backdrop ...

Upstart Holdings, Inc. (UPST) closed at $43.03 in the latest trading session, marking a +0.33% move from the prior day. The stock trailed the S&P 500, which registered a daily gain of 0.71%. Elsewhere, the Dow gained 1.03%, while the tech-heavy Nasdaq added 0.6%. The the stock of company has risen by 27.42% in the past month, leading the Finance sector's loss of 4% and the S&P 500's gain of 6.41%. Analysts and investors alike will be keeping a close eye on the performance of Upstart Holdings, Inc. in its up ...

Core Viewpoint - Artificial intelligence (AI) is generating significant value, but not all AI companies will succeed, as evidenced by the contrasting performance of Nvidia and other AI firms [1][3]. Group 1: Nvidia's Performance - Nvidia's stock increased by 239% last year and an additional 158% in 2024, adding $2.7 trillion to its market capitalization, making it the second-most valuable company globally [1][2]. - The company is a leader in designing powerful graphics processing units (GPUs) for data centers, crucial for AI model development, and is unable to meet the high demand [2]. Group 2: Challenges in the AI Sector - Many AI companies are struggling to deliver financial results that match their innovations, leading to significant declines in stock prices, with SoundHound AI down 74%, C3.ai down 85%, and Upstart Holdings down 89% from their all-time highs [3][4]. - The unpredictability of the AI landscape makes it difficult for investors to identify potential winners and losers [4]. Group 3: Investment Strategies - Exchange-traded funds (ETFs) can provide a diversified approach to investing in AI, reducing the risk of catastrophic losses from individual stock failures [5]. - The iShares Expanded Tech Sector ETF, established in 2001, offers exposure to a wide range of technology stocks, including those involved in AI [6][7]. Group 4: iShares ETF Holdings - The iShares ETF holds 279 stocks, with its top 10 holdings accounting for 53.9% of the total portfolio value, including major players like Meta Platforms, Nvidia, Apple, and Microsoft, all of which are leveraging AI technologies [8][9][10]. - Nvidia's flagship H100 GPU has set benchmarks for AI development, and the company is set to release a new generation of chips that could enhance performance by up to 30 times [11]. Group 5: ETF Performance - The iShares ETF has delivered a compound annual return of 10.8% since its inception, outperforming the S&P 500's 8.2% average annual return [13]. - Over the last 10 years, the ETF achieved a compound annual return of 20%, significantly exceeding the S&P 500's 13.2% return, highlighting the potential of technology stocks in the AI sector [14][15]. Group 6: Future Outlook - AI is projected to add substantial value to the global economy, with estimates of $7 trillion by Goldman Sachs and up to $200 trillion by Cathie Wood's Ark Investment Management by 2030 [15]. - The iShares ETF is positioned as a viable option for investors looking to capitalize on the growth of AI while mitigating risks associated with individual stock selection [16].

Core Viewpoint - Upstart has experienced a significant stock price increase of 45% in the past couple of months, but it remains 90% below its all-time high, raising questions about its long-term viability as an investment opportunity [1] Company Overview - Upstart has created an AI-powered platform that evaluates over 1,600 variables related to potential borrowers, which is utilized by more than 100 banking partners to enhance lending activities [2] - Since its inception, Upstart has originated loans totaling $39 billion, indicating a substantial market presence, yet it still has a long growth trajectory ahead given the total annual loan market is valued at $3.1 trillion [3] Market Conditions - A potential positive factor for Upstart is the recent reduction in the Federal Reserve's benchmark interest rate, which could stimulate borrowing demand [4] - However, Upstart's revenue has declined by 1% in 2022 and 39% in 2023, although projections suggest an 11% increase in sales for the third quarter, albeit from a low base [5] Valuation and Financial Health - The current price-to-sales ratio for Upstart is 6.2, reflecting a higher valuation compared to the previous year, indicating improved market sentiment [6] - Upstart has reported a net loss of $119 million over the past six months, raising concerns about its financial stability [8] Competitive Landscape - Upstart's reliance on favorable external conditions, particularly interest rates, highlights its cyclical nature, which may be more pronounced than traditional banks [7] - Major banks like JPMorgan Chase, Bank of America, Wells Fargo, and Citigroup dominate the lending market and have the resources to develop their own AI capabilities, potentially undermining Upstart's competitive advantage [10] Long-term Outlook - Upstart's current market capitalization stands at $3.4 billion, but achieving significant growth will require numerous favorable conditions, leading to skepticism about its long-term prospects [11]

Upstart Holdings, Inc. (UPST) closed the most recent trading day at $38.94, making no change from the previous trading session. This move was narrower than the S&P 500's daily loss of 0.17%. Meanwhile, the Dow lost 0.44%, and the Nasdaq, a tech-heavy index, lost 0.04%. Shares of the company have appreciated by 7.18% over the course of the past month, outperforming the Finance sector's loss of 0.26% and the S&P 500's gain of 1.25%. Market participants will be closely following the financial results of Upstar ...

Core Insights - Upstart (UPST) was a leading stock during the 2021 speculative growth boom but has since experienced a decline of over 90% from its peak [1] - The stock's significant drop is attributed to various market factors, but there is potential for recovery as the Federal Reserve enters a rate-cutting cycle [1] Company Performance - Upstart's stock has shown a sharp rebound recently, indicating a possible turnaround for the company [1] - The video discusses the reasons behind the stock's decline and the potential for it to become a major winner in the upcoming economic environment [1] Market Context - The analysis suggests that Upstart could benefit from the Federal Reserve's rate-cutting measures, positioning it favorably in the fintech sector [1] - The current market conditions may provide a conducive environment for Upstart's growth and recovery [1]

A financial researcher and avid investor with a keen eye for innovation and disruption, as well as growth buyouts and value stocks. Keeping an eye on the pace of high tech and early growth companies, I write about current events and the biggest news surrounding the industry, and strive to provide readers with ample research and investment opportunities. Analyst's Disclosure: I/we have a beneficial long position in the shares of UPST either through stock ownership, options, or other derivatives. I wrote this ...

It has been a good ride for Upstart (NASDAQ: UPST ) investors ever since the company reported earnings in early August. Shares have risen over 40% on better than expected results, a reduction of loans held on its balance sheet, and a possible Inevitable Investor is a private investor and speculator with 13 years of investing experience. An accountant by training, my investing style leans towards quality-orientation, rather than a pure growth investing, or value investing approach.The Inevitable Investor, is ...

Core Viewpoint - Upstart Holdings, Inc. has experienced a significant stock surge of 71.1% over the past three months, outperforming the broader tech sector and the S&P 500, raising questions about future growth potential [1] Company Performance - Upstart's recent success is closely linked to macroeconomic expectations regarding U.S. Federal Reserve policy, particularly interest rates, which directly impact its personal and auto loan business [2][4] - The company's annual revenue run rate has halved to around $1 billion due to aggressive interest rate hikes by the Federal Reserve, which aimed to curb inflation but adversely affected loan origination demand [3] Interest Rate Impact - The Federal Reserve's recent shift in policy, including a 50 basis point rate cut to a range of 4.75%-5%, is viewed as a lifeline for Upstart, potentially revitalizing its loan origination business [4][6] - A falling interest rate environment is expected to increase loan demand, allowing Upstart to regain lost business and expand its market share [7][8] AI and Innovation - Upstart's competitive advantage lies in its innovative use of AI, which automates the loan approval process, with 91% of loans being fully automated as of Q2 2024, enhancing efficiency compared to traditional lenders [9][10] - The company's AI capabilities enable it to assess a broader range of borrower profiles, allowing it to offer lower annual percentage rates (APRs) to riskier borrowers without compromising credit performance [10][11] Financial Outlook - Despite recent gains, Upstart's valuation remains attractive, trading at a discount compared to industry averages, with a closing price of $39.74 as of September 20, significantly below its all-time high of $390 [12] - The Zacks Consensus Estimate projects strong revenue growth, with expected sales of $566.15 million for the current year and $687.15 million for the next year, reflecting a year-over-year growth of 10.24% and 21.37% respectively [13] Conclusion - Upstart's unique positioning in the fintech space, combined with favorable interest rate trends and its AI-driven platform, suggests continued growth potential, making it an attractive opportunity for growth-oriented investors [15][16]

Upstart Holdings, Inc. (UPST) shares rallied 7.3% in the last trading session to close at $37.69. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 13.2% loss over the past four weeks. The optimism surrounding the stock can be attributed to Upstart's growing partner network. The company's artificial intelligence (AI)-based lending platform has been selected by several banks and credit unions, which is contribut ...