Upstart Stock Plunges Over 14% on Mixed Q3 Results and Subpar Outlook

Today, Upstart Holdings Inc.’s stock took a hit, plunging over 14% in premarket trading. This decline comes as investors reacted to the cloud-based artificial intelligence (AI)-powered lending platform’s mixed third-quarter results and subpar outlook for the future.

The company reported that its shares fell about 25% for the year, with a significant drop in Wednesday’s early premarket session. This was driven by the disappointing third-quarter results and a weaker-than-expected revenue forecast for the fourth quarter.

Interestingly, the stock’s AI model may have also played a role in the plunge. According to insights, the AI model intentionally tightened the credit box, leading to a miss on loan origination volume, which contributed to the stock’s decline.

Despite the dip in stock price, some analysts suggest that Upstart’s shares are currently at an attractive valuation, with a price-to-sales ratio of 5 being the lowest since April. This could present a buying opportunity for investors looking to capitalize on the market downturn.

In conclusion, Upstart’s stock plummeting over 14% today underscores the volatility and unpredictability of the stock market, particularly in response to company performance and market conditions. Investors will be closely watching how Upstart navigates these challenges and whether it can bounce back from this setback.