Why Upstart Stock Jumped 51% in 2024
Shares of Upstart (NASDAQ: UPST) stock gained 51% in 2024 according to data provided by S&P Global Market Intelligence. The AI credit evaluation company might have hit rock bottom, and the market expects lower interest rates to help it climb back up.
Upstart stock earned a lot of fans early in its time on the market. It was reporting staggeringly high growth and soaring profitability. Investors couldn't fathom that the tide might turn under different conditions, but the reason behind at least part of its initial success was interest rates at zero at the time. The stock has not weathered rising interest rates well, and Upstart stock is still 85% off of its highs.
The concept is simple and compelling. Upstart uses artificial intelligence and machine learning to evaluate credit risk and help creditors make better lending decisions. Specifically, using the Upstart platform, banks can approve more borrowers without adding risk of default, according to management. The more money they can safely lend, the more money they can make. More borrowers can get important loans they need to buy a house, car, or other important transaction, making this a win-win for everyone.
Source Fool.com
