1 Unstoppable Artificial Intelligence (AI) Stock Down 90% It's Time to Buy on the Dip

Core Viewpoint - Upstart Holdings is poised for a recovery in growth, which may lead to an increase in its stock price after experiencing significant declines due to rising interest rates and reduced consumer demand for loans [1][2][16] Company Overview - Upstart Holdings went public in 2020 at a price of $20, reaching over $400 within 10 months due to low interest rates driving loan demand [1] - The company utilizes artificial intelligence to transform the lending industry, having invested in AI for over a decade [4] Lending Model - Upstart's AI algorithm evaluates over 1,600 variables for creditworthiness, resulting in more than double the loan approvals compared to traditional methods and an average interest rate that is 38% lower [6] - The latest model, M18, enhances accuracy by running over 1 million predictions for each applicant, significantly improving the loan pricing process [7] Automation and Efficiency - In Q2, 91% of loan approvals were automated, leading to a threefold increase in the conversion rate for instant approvals [8] Financial Performance - Upstart generated $127.6 million in revenue during Q2, a 6% decline year-over-year, but showed signs of stabilization with a 34% increase in personal unsecured loans originated [9] - The company forecasts $150 million in revenue for Q3, representing an 11% increase from the previous year [11] Funding and Partnerships - Upstart faced challenges in funding but has added two new credit partners and regained some previous institutional partners, indicating improved funding conditions [12][13] - The company operates in a market with $831 billion in annual originations for personal and automotive loans, and has recently introduced a home equity line of credit product, expanding its market opportunities [14] Valuation - Upstart's stock is currently trading at a price-to-sales ratio of 6.3, which is 29% below its long-term average since going public [14]