What Happened?
Shares of aI-powered lending platform Upstart (NASDAQ: UPST) jumped 3.5% in the morning session after it announced a new partnership with ABNB Federal Credit Union to expand its personal loan offerings using its artificial intelligence (AI) lending platform. The credit union, which serves over 76,000 members, will leverage Upstart's AI technology to provide more consumers with access to digital personal loans. This news adds to the company's momentum as it continues to use its AI model, trained on extensive data points, to improve upon traditional credit scoring. The positive development helped investors look past the company's announcement from the previous day of an upsized $600 million convertible note offering, especially as a portion of the proceeds are intended to repurchase existing debt. The stock's move was also supported by a favorable market environment, where a broader tech rally boosted investor sentiment.
After the initial pop the shares cooled down to $66.02, up 4.1% from previous close.
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What Is The Market Telling Us
Upstart’s shares are extremely volatile and have had 74 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 13 days ago when the stock gained 3% on the news that a string of impressive earnings reports from industry leaders pointed to resilient growth. Leading the charge was Microsoft, which neared a $4 trillion valuation after reporting booming sales in its Azure cloud division and forecasting record spending. This positive momentum was echoed elsewhere in the sector. PTC Inc. shares jumped on a 24% revenue increase driven by its AI-powered portfolio and raised its full-year outlook. Similarly, F5 Networks and BigCommerce both surpassed analyst expectations for revenue and earnings. The optimism extended to ad-tech, where AppLovin gained on investor confidence in its AI-driven advertising solutions, showcasing broad strength in specific software niches.
Upstart is up 8.6% since the beginning of the year, but at $66.02 per share, it is still trading 25.6% below its 52-week high of $88.77 from February 2025. Investors who bought $1,000 worth of Upstart’s shares at the IPO in December 2020 would now be looking at an investment worth $2,240.
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