Upstart Holdings, Inc., together with its subsidiaries, operates a cloud-based artificial intelligence (AI) lending platform in the United States. Its platform includes personal loans, automotive retail and refinance loans, home equity lines of credit, and small dollar loans that connects consumer demand for loans to its to bank and credit unions. Upstart Holdings, Inc. was founded in 2012 and is headquartered in San Mateo, California.

Upstart Holdings, Inc.

Key Points
U.S. regional banks have sparked concerns about the health of some consumer credit segments.
Upstart stock has been swept up in the chaos.
Upstart is generating explosive growth right now, and its stock looks attractively valued.
Upstart Holdings (NASDAQ: UPST) developed an artificial intelligence (AI) algorithm to perform credit assessments on potential borrowers. It can analyze more data and deliver faster approvals than traditional assessment methods, so a growing number of banks are using it to originate their consumer loans.
However, Upstart stock has plummeted by 27% during the past 30 days, as some U.S. regional banks have flagged potential credit losses from bad loans and even fraud over the last few weeks, which is dragging the entire consumer credit sector down. There is no suggestion Upstart contributed to any of the purported issues -- in fact, loans originated using its algorithm typically outperform those originated through traditional assessment methods.
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As a result, this might be a buying opportunity for investors. Upstart is scheduled to release its results for the third quarter of 2025 on Nov. 4. Here's why the report could be a bullish catalyst.
AI-powered lending could be a trillion-dollar opportunity
Banks have relied on Fair Isaac's FICO credit scoring system for more than three decades, but it only takes a handful of factors into account, like a person's existing debt and their repayment history. Therefore, Upstart believes it's outdated. It has designed its AI algorithm to analyze over 2,500 data points instead, to get a more accurate sense of a potential borrower's ability to repay their loan.
Upstart says 92% of its approvals are fully automated and instant, whereas it would take a human assessor days or even weeks to analyze a similar amount of data. This creates a convenient customer experience, which is why banks and credit unions are eager to adopt the technology.
Most of Upstart's originations are unsecured personal loans, but it has a growing presence in the automotive and home equity line of credit (HELOC) segments. During the second quarter of 2025, the company originated 372,599 loans across all categories, which was up by an eye-popping 159% from the year-ago period. They had a dollar value of $2.8 billion, which was a three-year high.
Granted, the past few years have been difficult for Upstart, as elevated interest rates drove down demand for consumer loans. The Federal Reserve cut rates three times in the closing months of 2024, which contributed to Upstart's strong second-quarter result. However, the company also cited an improvement in its AI algorithm, which converted more applicants into borrowers.
This momentum could have serious legs in the long run. At Upstart's "AI Day 2025" event earlier this year, Chief Executive Officer Dave Girouard said he expects all human loan assessment methods will be replaced by AI during the next 10 years. That leaves $25 trillion in annual loan originations up for grabs worldwide, and a whopping $1 trillion per year in fee revenue.
Upstart is on track for record revenue this year
As a result of its surging originations, Upstart's second-quarter revenue jumped by 102% year over year to $257 million. It was the fourth-consecutive quarter in which revenue growth accelerated.
The strong result prompted management to raise the company's full-year revenue forecast to $1.055 billion for 2025, which would be the first time it crosses the billion-dollar milestone. If Upstart's third-quarter result comes in above management's estimate of $280 million on Nov. 4, investors should look for a further upward revision to the full-year forecast.
Upstart's bottom line is also benefiting from the surge in revenue. The company reported $5.6 million in net income on a generally accepted accounting principles (GAAP) basis during the second quarter, and it's now on track for its first profitable year since 2021.
Upstart stock trades at an attractive valuation
As I mentioned, there hasn't been any indication that Upstart's algorithm is driving the recent issues with bad loans at regional banks. In fact, Upstart won a regional bank client as recently as Oct. 15, which is now using its algorithm to originate personal loans, car loans, and HELOCs.
Plus, Upstart's algorithm was battle-tested during the difficult 2022 and 2023 period, and it performed well. The company wouldn't be growing so quickly right now if that weren't the case.
With all of that in mind, Upstart stock could be a great buy on the dip ahead of its Nov. 4 earnings report. It's trading at a price-to-sales (P/S) ratio of just 5.6 as I write this, which is a 50% discount to its average of 11.1 dating back to its initial public offering (IPO) in 2020.
It looks even more attractive on a forward basis, if we measure its P/S ratio using Wall Street's 2026 revenue forecast of $1.34 billion:
In other words, Upstart stock would have to rise by 55% by the end of next year just to maintain its current P/S ratio of 5.6, and it would have to rocket by 208% in order for its P/S ratio to match its long-term average of 11.1.
As a result, the risk-reward picture looks very compelling right now, so Upstart stock could be a solid buy, especially for investors willing to hold on to it for at least the next 12 months (and beyond).
Should you invest $1,000 in Upstart right now?
Before you buy stock in Upstart, consider this:
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Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Upstart. The Motley Fool recommends Fair Isaac. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

1 Magnificent Artificial Intelligence (AI) Stock to Buy Hand Over Fist Heading Into November

Investors in Upstart Holdings Inc (Symbol: UPST) saw new options begin trading today, for the December 5th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the UPST options chain for the new December 5th contracts and identified one put and one call contract of particular interest.
The put contract at the $51.00 strike price has a current bid of $4.90. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $51.00, but will also collect the premium, putting the cost basis of the shares at $46.10 (before broker commissions). To an investor already interested in purchasing shares of UPST, that could represent an attractive alternative to paying $51.63/share today.
Because the $51.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 58%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 9.61% return on the cash commitment, or 81.48% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Upstart Holdings Inc, and highlighting in green where the $51.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $53.00 strike price has a current bid of $5.10. If an investor was to purchase shares of UPST stock at the current price level of $51.63/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $53.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 12.53% if the stock gets called away at the December 5th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if UPST shares really soar, which is why looking at the trailing twelve month trading history for Upstart Holdings Inc, as well as studying the business fundamentals becomes important. Below is a chart showing UPST's trailing twelve month trading history, with the $53.00 strike highlighted in red:
Considering the fact that the $53.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 46%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 9.88% boost of extra return to the investor, or 83.77% annualized, which we refer to as the YieldBoost.
The implied volatility in the put contract example is 99%, while the implied volatility in the call contract example is 107%.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 250 trading day closing values as well as today's price of $51.63) to be 92%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

December 5th Options Now Available For Upstart Holdings (UPST)

Key Points
Shares of Upstart and Atlassian have suffered double-digit declines this year, but certain Wall Street analysts expects triple-digit gains in the next 12 months.
Upstart aims to disrupt the lending industry with artificial intelligence and the company reported triple-digit revenue growth in the second quarter.
Atlassian is a leader in work management software for development and marketing teams, and more customers are using its artificial intelligence tools.
Year to date, shares of Upstart (NASDAQ: UPST) have fallen 15% and shares of Atlassian (NASDAQ: TEAM) have tumbled 30%, but certain Wall Street analysts expect shareholders to see triple-digit returns in the next year.
Hal Goetsch at B. Riley Financial has set Upstart with a target price of $105 per share. That implies 102% upside from its current share price of $52.
Keith Weiss at Morgan Stanley has set Atlassian with a target price of $320 per share. That implies 101% upside from its current share price of $159.
A word of caution, the target prices I just quoted are the most bullish forecasts on Wall Street, so investors should not simply assume the analysts are correct. Read on to learn more about these artificial intelligence stocks.
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Upstart Holdings: 102% implied upside
Upstart is an artificial intelligence (AI) lending platform that helps banks and credit unions better assess credit risk. Most lenders currently use simple rules-based systems built around FICO scores, but the limited number of variables they consider can lead to inaccuracies. Upstart solves that problem by analyzing over 2,500 data points per applicant, and its machine learning models improve each time a borrower makes or misses a payment.
Upstart's AI lending platform has models that optimize customer acquisition, fraud detection, and default forecasting. It also automates the underwriting process in most cases. In turn, lending partners profit because they can approve more borrowers at lower interest rates. Upstart says loans originated on its platform since Q2 2023 are on pace to return 11.3% annually, topping the yield on 10-year Treasury bonds by 7 percentage points.
Upstart reported solid second-quarter financial results. Total revenue increased 102% to $257 million driven by strong growth in personal loans, the core business that accounts for 90% of total originations. But demand for newer products (auto loan and home loans) increased exceptionally quickly. Meanwhile, non-GAAP net income was $0.36 per diluted share, up from a loss of $0.17 per diluted share last year.
Looking ahead, Wall Street estimates Upstart's adjusted earnings will grow at 66% annually through 2027. That makes the current valuation of 60 times earnings look relatively cheap, especially when the company beat the consensus earnings estimate in each of the last six quarters.
As a caveat, Upstart stock is very sensitive to macroeconomic data. Demand for loans depends in part on interest rates, so anything that makes rate cuts less likely would bad news for the company. Similarly, anything that hints at a slowdown in consumer spending, such as weak jobs data, would also be bad news. Investors comfortable with volatility should consider buying a small position.
Atlassian: 101% implied upside
Atlassian develops work management and service management software. The company is best known for Jira, a platform that helps teams plan, track, and collaborate on projects. Jira is the industry standard among software developers, but the product has also gained traction with non-technical departments like marketing, human resources, and finance.
Importantly, Gartner recently ranked Atlassian as a leader in work management software for development and operations teams, as well as marketing teams. No other company has been recognized as a leader in both categories. That is an important competitive advantage because it lets Atlassian efficiently deepen customer relationships by winning the business of one department and expanding across the organization.
Atlassian has also introduced AI agents for technical and non-technical teams. Rovo Dev helps developers plan, generate, and review code, while the standard version of Rovo helps other users surface insights and automate workflows in software products like Jira. Morgan Stanley analysts see Atlassian as one of the companies best position to benefit from AI agents.
Atlassian reported encouraging financial results in the fourth quarter of fiscal 2025, which ended in June, beating estimates on the top and bottom lines. Revenue increased 22% to $1.3 billion, an acceleration from the previous quarter, and non-GAAP earnings increased 48% to $0.98 per diluted share. Management also said adoption of AI products climbed 50% to 2.3 million monthly active users.
Looking ahead, Atlassian estimates its $67 billion addressable market is expanding at 13% annually. Wall Street expects the company's adjusted earnings to increase at 19% annually through fiscal 2027. That makes the current valuation of 46 times earnings look somewhat expensive, but not absurd. I am skeptical about Atlassian shares returning 101% in the next year, but investors with a three- to five-year time horizon should consider buying a small position.
Should you invest $1,000 in Upstart right now?
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Annie Dean, a Vice President at Atlassian, is a member of The Motley Fool's board of directors. Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Atlassian and Upstart. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

2 Artificial Intelligence (AI) Stocks to Buy Before They Soar 100%, According to Select Wall Street Analysts

Key Points
Upstart stock has been volatile in 2025, and it's down 23.5% year to date.
As interest rates have slowly declined, the company's performance has improved.
Upstart stock trades today at a reasonable valuation.
Upstart (NASDAQ: UPST) has been an extremely volatile investment during its time as a public company. Most recently, the stock price is off by 23.5% year to date, but it has been up and down this year.
At the current price, Upstart stock trades at only 19 times forward, one-year earnings, which is an attractive entry point for a company with high growth opportunities. For the right sort of investor, now could be a good time to buy Upstart.
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Interest rates are coming down
Upstart operates a credit evaluation platform for lenders that the company asserts uses artificial intelligence (AI) to assess would-be borrowers' credit risks more accurately than the traditional credit score. However, in recent years, macroeconomic conditions created a more hostile environment for lending in general, which was a challenge to Upstart's business.
Considering how fast the company was growing back when the Federal Reserve's benchmark interest rate was close to zero, its slump in revenue and its slide into unprofitability when market-based interest rates climbed may have come as a shock to investors. The stock lost nearly 88% of its value from its peak, a severe blow to its shareholders.
Now, a few factors have come together to get Upstart going again. The stock's valuation dropped to the point that it would have been hard for it to fall further. Management also made strong efforts to cut costs. Most importantly, perhaps, is that the Federal Reserve's prime lending rate as well as market interest rates have started to come down. Lower interest rates make it easier for borrowers to pay back their loans and avoid defaulting. That stimulates the lending environment and makes it easier for Upstart to identify good candidates for lenders to provide credit to.
After around two years of declining revenue, Upstart's top line is back on the upswing. Revenue more than doubled year over year in the second quarter, and transaction volume rose by 159%. It also regained profitability on a GAAP (generally accepted accounting principles) basis a quarter earlier than expected.
Upstart stock should be going back up
The Fed cut the federal funds rate again in September, and it's expected to cut it twice more before the end of the year, so Upstart should keep enjoying growth. But investors should already see improved performance in its third-quarter results, which are slated to be released on Nov. 4. Management is guiding for sales to increase about 73% year over year in the quarter with net income of $9 million.
If you buy the stock at today's low price, you should expect Upstart stock to jump if it delivers a solid report, although there are no guarantees.
Long term, Upstart has incredible potential to prosper by disrupting the status quo in credit evaluation, a $1 trillion opportunity. If you have an appetite for risk and a long time horizon, now could be the ideal time to buy shares.
Should you invest $1,000 in Upstart right now?
Before you buy stock in Upstart, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Upstart wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $646,805!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,123,113!*
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Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Upstart. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

1 Incredible Reason to Buy Upstart (UPST) Stock in October

Upstart Holdings UPST is broadening its reach well beyond personal loans, using its AI-powered lending platform to tap new segments like auto loans, home equity and small-dollar credit. In the second quarter of 2025, these newer businesses collectively drove nearly 20% of new borrowers on the Upstart platform, highlighting how diversification has become central to Upstart’s next growth phase. The expansion comes as the company more than doubled its revenues year over year and achieved GAAP profitability earlier than anticipated.
Auto lending remains a key driver, with originations jumping 87% sequentially to $114 million in the second quarter of 20255. The company’s Auto Retail software, now gaining significant traction with car dealerships, is fueling that growth. A sharper focus on simplifying financing has accelerated adoption, leading to rising volumes of dealer-driven loan requests and finalized agreements.
The home equity segment is also scaling rapidly, with originations up nearly ninefold year over year to $68 million. A breakthrough in instant property verification now enables borrowers to complete ownership and income checks in under a minute, demonstrating how Upstart’s automation capabilities are redefining the traditionally slow HELOC process.
Small-dollar “relief” loans add another leg to growth, climbing 40% sequentially as Upstart tests its AI models across a broader borrower base. The company’s latest underwriting model, Model 22, improved accuracy and conversion, providing a foundation for these new verticals.
To sustain this diversification, Upstart aims to move most Auto and Home loans off its balance sheet by late 2025, supported by third-party funding and strong partnerships with banks and credit unions.
Diversification at Other Fintechs: PayPal and Intuit
PayPal PYPL has steadily diversified its revenues beyond peer-to-peer payments by expanding into merchant solutions, digital wallets, and consumer credit through PayPal Credit and Pay Later. Moreover, the PYUSD stablecoin and crypto payment options position PayPal for emerging digital commerce trends.
Meanwhile, Intuit INTU has evolved from tax and accounting software into a full financial ecosystem. Its Credit Karma unit drives consumer finance insights, while Mailchimp extends its reach into marketing automation for small businesses. Both PayPal and Intuit mirror Upstart’s strategy of broadening their core capabilities to strengthen platform engagement and reduce reliance on any single revenue source.
Upstart’s Price Performance, Valuation and Estimates
Shares of Upstart have climbed 16.8% in the past six months, underperforming both the broader industry and the S&P 500 composite.
Image Source: Zacks Investment Research
From a valuation perspective, we note that Upstart shares are currently overvalued, as suggested by the Value Score of F.
In terms of forward 12-month Price/Sales (P/S), Upstart is currently trading at 3.77X, which is at a premium to the industry average of 3.52X.
Image Source: Zacks Investment Research
While the full-year 2025 and 2026 Zacks Consensus Estimates for EPS have been revised downward over the past two months, the figures suggest significant increases year over year.
Image Source: Zacks Investment Research
Currently, Upstart carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Intuit Inc. (INTU) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Is Upstart's Diversification Strategy the Key to Lasting Growth?

Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in Upstart Holdings Inc (Symbol: UPST), where a total of 32,970 contracts have traded so far, representing approximately 3.3 million underlying shares. That amounts to about 42.3% of UPST's average daily trading volume over the past month of 7.8 million shares. Especially high volume was seen for the $55 strike call option expiring October 17, 2025, with 1,492 contracts trading so far today, representing approximately 149,200 underlying shares of UPST. Below is a chart showing UPST's trailing twelve month trading history, with the $55 strike highlighted in orange:
PepsiCo Inc (Symbol: PEP) saw options trading volume of 32,198 contracts, representing approximately 3.2 million underlying shares or approximately 40.4% of PEP's average daily trading volume over the past month, of 8.0 million shares. Particularly high volume was seen for the $155 strike call option expiring October 17, 2025, with 5,224 contracts trading so far today, representing approximately 522,400 underlying shares of PEP. Below is a chart showing PEP's trailing twelve month trading history, with the $155 strike highlighted in orange:
And Newmont Corp (Symbol: NEM) options are showing a volume of 49,555 contracts thus far today. That number of contracts represents approximately 5.0 million underlying shares, working out to a sizeable 40.3% of NEM's average daily trading volume over the past month, of 12.3 million shares. Especially high volume was seen for the $105 strike call option expiring October 17, 2025, with 1,746 contracts trading so far today, representing approximately 174,600 underlying shares of NEM. Below is a chart showing NEM's trailing twelve month trading history, with the $105 strike highlighted in orange:
For the various different available expirations for UPST options, PEP options, or NEM options, visit StockOptionsChannel.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Noteworthy Thursday Option Activity: UPST, PEP, NEM

The fintech landscape in 2025 has never been more dynamic, with companies like PayPal PYPL and Upstart Holdings UPST leading innovation in digital payments and AI-driven lending. For investors seeking exposure to top fintech stocks in 2025, both names offer compelling stories, but they operate in very different arenas.
PayPal, a veteran in online payments, continues to expand its ecosystem through strategic partnerships, new payment features, and growing adoption of Venmo and branded checkout solutions. Meanwhile, Upstart has captured attention with its AI-powered lending platform, showing strong revenue growth and expanding beyond personal loans into auto and home financing. Yet, each stock carries its set of risks, macro uncertainties and competition for PayPal, and credit sensitivity and volatility for Upstart.
Let’s examine PayPal’s growth, Upstart’s AI lending innovations and other factors to find out which fintech stock deserves a spot in your portfolio.
PayPal: A Proven Leader in Digital Payments
PayPal remains one of the most established fintech stocks in 2025, and its recent moves show a company actively evolving to stay relevant. Venmo, a key growth engine, saw revenues rise more than 20%, while total payment volumes grew 12%, its strongest growth rate in three years. Venmo debit card usage is accelerating, with monthly active accounts up 40%, while “Pay with Venmo” total payment volume surged more than 45%, reflecting strong consumer adoption. Branded checkout continues to expand. More than 60% of U.S. branded volume is now transacted through PayPal’s upgraded experience, and international rollouts in Germany and the U.K. are underway.
PayPal is also pushing into AI and partnerships that broaden its reach. Collaborations with Google, Salesforce, and Anthropic aim to integrate AI-driven commerce tools and seamless payment experiences, while the PYUSD stablecoin and crypto payment options position PayPal for emerging digital commerce trends.
Additionally, its multi-year BNPL (Buy Now, Pay Later) partnership with Blue Owl Capital and holiday promotions offering 5% cashback illustrate the company’s innovative approach to boosting transaction volume.
Despite intense competition from other fintechs and traditional banks, PayPal’s scale, diversified products and strategic partnerships make it a reliable choice for investors seeking fintech stocks with strong growth prospects.
Upstart: AI Lending Growth With Volatility
Upstart has emerged as a high-growth fintech stock, thanks to its AI-powered lending platform, which has transformed traditional credit underwriting. In the second quarter of 2025, Upstart posted revenues of $257 million, more than double year over year, while loan originations surged to $2.8 billion, the highest volume in three years.
Impressively, the company returned to GAAP profitability with $5.6 million in net income compared to a $54.5 million loss in the prior-year period, and contribution profit rose 85% to $141 million, maintaining a 58% margin. Conversion rates improved to nearly 24%, demonstrating strong operational efficiency and borrower demand.
Upstart is also diversifying beyond personal loans. Auto originations grew sixfold and its Home segment nearly ninefold over the past year, together representing more than 10% of total loan volume. Partnerships with credit unions such as Cornerstone Community Financial and ABNB Federal Credit Union expand Upstart’s reach and provide stable funding channels. Its AI model, Model 22, resulted in a 17 percentage-point boost in separation accuracy compared to the benchmark textbook credit model, reducing costs and improving approval speed, while 92% of loans are fully automated.
However, Upstart AI lending carries risk. Its exposure to credit-sensitive borrowers makes it vulnerable to economic downturns. Its share price in recent times was affected by softer credit conditions and fallout from distress in the used car lending market. Although not directly related to the company, the bankruptcy of Tricolor Holdings, which catered to borrowers with limited credit history, amplified worries about credit quality.
How Do Zacks Estimates Compare for PYPL & UPST?
The Zacks Consensus Estimate for PayPal’s 2025 sales and EPS implies a year-over-year increase of 3.92% and 12.47%, respectively. EPS estimates for 2025 have been trending northward over the past two months.
For PYPL:
Image Source: Zacks Investment Research
Meanwhile, the consensus estimate for Upstart’s 2025 sales implies a year-over-year rise of 51.36%. While the full-year 2025 and 2026 Zacks Consensus Estimates for EPS have been revised downward over the past two months, the figures suggest significant increases year over year.
For UPST:
Image Source: Zacks Investment Research
Valuation: PYPL vs. UPST
From a valuation perspective, we note that PayPal shares are trading cheap, as suggested by the Value Score of A. However, Upstart shares are currently overvalued, as implied by the Value Score of F.
In terms of forward 12-month Price/Sales (P/S), PYPL stock is trading at 1.91X, below its three-year median of 2.16X, while Upstart is currently trading at 3.98X, which is also below its three-year median of 4.08X.
Image Source: Zacks Investment Research
Price Performance: PYPL vs. UPST
Over the past six months, shares of UPST have outperformed PayPal. PYPL shares have also underperformed the S&P 500 composite.
Image Source: Zacks Investment Research
Conclusion: Why PayPal Stands Out
Both PayPal and Upstart offer compelling cases in the fintech sector, but the contrast is clear. Upstart’s AI-driven lending platform is innovative and growing rapidly, yet its heavy exposure to credit-sensitive borrowers makes it volatile.
PayPal, by comparison, combines scale, diversified products and strong user engagement through Venmo, branded checkout and strategic AI partnerships. Its steady revenue growth, expanding global reach, and innovative initiatives across payments and commerce provide a more reliable foundation.
For investors seeking fintech stocks with lower volatility and a proven track record, PayPal stands out as the stronger choice for a portfolio. Even though both companies currently carry a Zacks Rank #3 (Hold) each, PYPL has a VGM Score of B, while UPST has a score of F, implying that PayPal is having a better hand at the moment. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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PayPal vs. Upstart: Which Fintech Stock Should You Buy Today?

Key Points
Upstart was using artificial intelligence before it became commonplace.
Now that companies are embracing AI, Upstart’s growth prospects are bright.
This stock has underperformed of late, but the analyst community thinks this weakness isn’t merited.
Anybody who buys a particular stock obviously does so with the expectation that it will gain in value. No level-headed investor genuinely expects a normal-sized trade to become life-changing, though.
Yet, there's no denying it happens. Amazon and Nvidia are a couple of names that come to mind.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Could an up-and-comer like Upstart (NASDAQ: UPST) be the next millionaire-making stock most don't see coming? Although most investors aren't convinced, a small handful are. Here's what they're seeing, along with what the rest of the crowd is missing.
What's Upstart?
Upstart is a new kind of credit-reporting bureau akin to Equifax (NYSE: EFX), TransUnion (NYSE: TRU), and Experian (OTC: EXPG.Y), although it also plays a credit-scoring role like Fair Isaac's (NYSE: FICO) FICO model.
Even with all the ways it's like the industry's legacy services, however, it's also distinctly different from these established names...and it's better. Its technology is easier for would-be lenders to use than traditional ways of retrieving a credit score. It also provides lenders with a more accurate assessment of someone's creditworthiness.
The key is the underlying platform itself.
One of Upstart's co-founders -- computer science and economics student Paul Gu -- did something that no one else had even attempted it before, or tried to imitate in the meantime. He developed an artificial intelligence algorithm that incorporates all the relevant information regarding a would-be borrower to paint a better picture of an individual's creditworthiness.
Upstart's platform looks at more than 2,500 unique variables as part of its credit-scoring process. Some of them are obvious ones, like income, employment, and someone's repayment history. Many of its other data points aren't ones on Fair Isaac's radar, even though they arguably should be.
More important to lenders, borrowers, and even interested investors, the approach is proving to be a better one for every party involved. Its solution allows for 43% more approvals without any additional defaults compared to the more traditional approach of determining an individual's credit score. More than nine out of 10 of its loan approvals are automated, and therefore completed in a matter of seconds. Lenders just need access to the company's application programming interface, or API, which links their systems to Upstart's.
At the tipping point
The technology works. But that doesn't mean Upstart's growth has been easy or consistent since its debut in 2012.
Like any start-up launching into a long-established industry dominated by a handful of powerful incumbents, this start-up has struggled at times. The mainstreaming (and then explosion) of artificial intelligence since ChatGPT's launch in late 2022, however, appears to have been the proverbial tipping point for this outfit. There are now more than 100 banks using Upstart's technology, up from fewer than 60 as of early 2022 and fewer than 20 at the beginning of 2021.
That's the chief reason its revenue has not only grown every quarter since the third quarter of last year, but is now accelerating. So too is the company's bottom line. Upstart swung to a profit in this year's Q2 and analysts expect earnings to continue rising. This year's full-year per-share estimated profit of $1.65 per share is projected to rise to $2.49 next year.
But that's still only a drop in the bucket. The 697,092 loans that Upstart's platform originated last year -- worth a total of $5.9 billion -- are a mere fraction of the total U.S. loan market. Numbers from the Federal Reserve indicate that U.S. consumers took out $131 billion in new mortgage loans just in Q2 of this year alone. They also collectively borrowed $13 billion to purchase vehicles, and took out $9 billion in home equity loans.
Although only the latter two loan types are currently facilitated by Upstart, that's still an enormous opportunity. Indeed, Mordor Intelligence believes the U.S. digital lending business is set to grow at an annualized pace of more than 13% through 2030, now that using artificial intelligence to quickly facilitate loans is an option. Furthermore, this growth could persist well beyond that point in time.
Upstart is well-positioned to capture at least its fair share of this growth, and realistically speaking, capture more than its fair share of it.
Only if you can make a long-term commitment
So, yes, buying Upstart stock today could help set you up for life, particularly given its lethargic performance since late last year, which doesn't reflect its long-term growth potential. Most investors seem concerned about the prospect of economic weakness, and fear the effect it could have on the company's lending and credit-scoring business.
Upstart's business continues to climb that wall of worry. This year's swing to profitability is being fueled by top-line growth that is forecast to roll in at 66% more than last year's, to be followed by next year's 27% growth. Lenders and borrowers continue to fall in love with just how well Upstart's solution works.
This might help seal the deal: Although most investors aren't very bullish right now, the analyst community covering the company mostly is. Their one-year average price target of $77.57 is almost 60% higher than the stock's recent price of $48.58. That's not a bad way to start out a new trade, even if you should only consider a stake in this company if you're truly committed to making it a long-term holding. There's likely to be a lot of volatility along the way.
Should you invest $1,000 in Upstart right now?
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James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Equifax, Nvidia, and Upstart. The Motley Fool recommends Experian Plc and Fair Isaac. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Prediction: Buying Upstart Stock Today Could Set You Up for Life

OpenAI's Worth Half a Trillion Dollars

Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in Marvell Technology Inc (Symbol: MRVL), where a total of 122,387 contracts have traded so far, representing approximately 12.2 million underlying shares. That amounts to about 51.4% of MRVL's average daily trading volume over the past month of 23.8 million shares. Particularly high volume was seen for the $90 strike call option expiring October 17, 2025, with 10,439 contracts trading so far today, representing approximately 1.0 million underlying shares of MRVL. Below is a chart showing MRVL's trailing twelve month trading history, with the $90 strike highlighted in orange:
Humana Inc. (Symbol: HUM) options are showing a volume of 12,501 contracts thus far today. That number of contracts represents approximately 1.3 million underlying shares, working out to a sizeable 50.9% of HUM's average daily trading volume over the past month, of 2.5 million shares. Particularly high volume was seen for the $300 strike call option expiring October 17, 2025, with 399 contracts trading so far today, representing approximately 39,900 underlying shares of HUM. Below is a chart showing HUM's trailing twelve month trading history, with the $300 strike highlighted in orange:
And Upstart Holdings Inc (Symbol: UPST) saw options trading volume of 42,922 contracts, representing approximately 4.3 million underlying shares or approximately 50.7% of UPST's average daily trading volume over the past month, of 8.5 million shares. Particularly high volume was seen for the $60 strike call option expiring October 10, 2025, with 2,207 contracts trading so far today, representing approximately 220,700 underlying shares of UPST. Below is a chart showing UPST's trailing twelve month trading history, with the $60 strike highlighted in orange:
For the various different available expirations for MRVL options, HUM options, or UPST options, visit StockOptionsChannel.com.
Also see:
Funds Holding CRK
SPXV shares outstanding history
Institutional Holders of INZY
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Indicator	TTM Median
P/E	0.00 13.37
Price/Sales	12.68 1.92
P/B	10.61 1.10
P/FCF	91.29 10.25

Indicator	TTM Median
ROE	-27.55 10.06
ROA	-8.87 1.13
Net Worth	6.26 0.99
Quick Ratio	0.00 1.40
Current Ratio	0.60 0.96

Indicator	TTM Median
Net Profit Margin	-30.11 15.86
Operating Margin	-38.53 21.72
Gross Margin	72.40 68.17
Return on tangible equity	-30.97 12.03

Indicator	TTM Median
EPS	0.45 0.60
EPS Forecast	0.57 0.61
Revenue	162.00M 85.50M
Gross Profit	123.00M —
EBITDA	-40.00M —

Upstart Holdings, Inc.

TTM metrics for the latest quarter under IFRS and their historical dynamics

Valuation

Debts

Efficiency

Other ratios

Revenue