Why Upstart Stock Climbed 30% in October
Continuing its volatile journey, Upstart (NASDAQ: UPST) stock gained 30% in October, according to data from S&P Global Market Intelligence. The market gave it a thumbs-up after the Federal Reserve lowered interest rates for the first time in four years.
Upstart enchanted investors when it first became a public company, and its stock climbed to astronomical heights before crashing and losing most of its value. Since then, it's bounced back and forth between extreme highs and lows.
Upstart operates a credit evaluation platform powered by artificial intelligence, and while it was supposed to be the next great thing in credit scoring, it has been highly affected by the interest-rate environment. Although its systems are able to identify credit risk more accurately than the traditional credit scoring systems, it's been much harder to do that when interest rates have been elevated and default rates are higher. Lenders are being more careful about how they approve candidates, and Upstart's business has been in freefall.
Source Fool.com
