UPST Stock Begins an AI-Powered Lending Revolution

Make no mistake: based in California Reached (NASDAQ:UPST) seeks to disrupt the lending industry as we know it. More than a typical investment, a stake in UPST stock is a way to participate in a modern grassroots movement.

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To be honest, the traditional loan is an extremely complicated and laborious process. Yet Upstart uses machine learning to make it easier and more inclusive.

Founded in 2012, Upstart is on a mission to revolutionize the way lending institutions determine creditworthiness, beyond credit reports and FICO scores. People aren’t numbers, and Upstart’s artificial intelligence (AI)-powered platform is improving borrowers’ access to loans at reasonable rates.

In late 2021 and early 2022, tech and financial stocks came under pressure – a double whammy for Upstart shareholders. However, this presents a potential buying opportunity as more customers and financial institutions trust and appreciate Upstart’s worthy mission.

UPST stock at a glance

Going back to where it all began, Upstart’s initial public offering (IPO) took place on On December 16, 2020, after the company priced its offer at $20 per share.

First trade of UPST stock on the Nasdaq Stock Exchange was $26, and the stock price rose 30% in afternoon trading that first day.

This, however, was only the beginning of the rocket ride. If you can believe it, Upstart’s stock price catapulted to $100 in February 2021, followed by $200 in August, $300 in September, and (briefly) $400 in mid-October.

Let’s not mince words here. When a stock goes from $26 to $400 in a few months, something is wrong. A reversal was therefore almost inevitable.

As we mentioned earlier, negative price pressure on technology and financial stocks weighed on UPST stock in the fourth quarter of 2021 and early 2022. As a result, the stock returned to $109.

Good for customers, great for business

In other words, you might have the option to buy the stock at the same price it was a year ago. It’s not every day that we go back like this and own a piece of a business that may be transforming an entire industry.

Just consider how Upstart threatens traditional lenders and their old fashioned business models. With Upstart’s technology platform, 67% of loans were instantly approved and fully automated in the third quarter of 2021.

Upstart sees itself as a two-sided company that connects consumers with banking partners using AI. It’s a transformative concept, but is it financially viable?

To answer this question, we need only look at the data. During the first quarter of 2021, Upstart’s total revenue under generally accepted accounting principles (GAAP) increased by 90%. This growth rate increased to 1,018% in the second quarter of 2021 and 250% in the third quarter.

Credit Unions Calling You

Like it or not, Upstart’s AI-powered revolution won’t happen without the participation of at least some banking institutions.

The good news is that these institutions are increasingly joining Upstart to improve the lending and borrowing experience. In particular, two credit unions recently partnered with Upstart.

One of them is based in Washington DC AgFed Credit Unionwho has in partnership with Upstart to provide personal loans, in an effort to better reach new members in the communities it serves.

AgFed CEO Margie Click praised Upstart’s “modern, all-digital lending experience,” which will help AgFed “meet the expectations and needs of today’s consumer.”

Meanwhile, based in New York Corning Credit Union (UCC) is job with Upstart to bring AI-powered personal loans to more customers. Corning Credit Union is a $2.1 billion credit union with a membership base that includes more than 1,700 employer groups, associations and businesses.

“Through the strategic partnership with Upstart, CCU is able to deliver a modern, all-digital, AI-powered experience to lend to more people,” said Jason Bierman, senior vice president and chief administrative officer, Corning Credit Union. .

Takeaways for UPST stock

Obviously, Upstart wins the trust and participation of customers and financial companies.

This is necessary for Upstart to continue on its disruptive and innovative path. This is bad news for traditional and prohibitive lenders, but it is very good for customers.

It’s also good for Upstart investors. UPST Stock gets an “A” in my portfolio binder. With UPST shares, you have the opportunity to participate in an exciting fintech movement, at a very attractive price.

As of the date of publication, neither Louis Navellier nor the member of the InvestorPlace research staff principally responsible for this article holds (directly or indirectly) any position in the securities mentioned in this article.

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