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.

Слабый индекс, значительно упал. Быки продолжают терять уверенность.

Weak index, significantly down. Bulls continue to lose confidence.

Сильный индекс, без изменений. Рынок не поддерживает быков.

Strong index, flat. The market does not support the bulls.

Слабый индекс, незначительно вырос. Приток средств в лонги остается на невысоком уровне.

Weak index, slightly up. The inflow of funds into longs remains at a low level.

(RTTNews) - AI lending platform Upstart Holdings, Inc. (UPST) on Wednesday said that it has signed a $4 billion forward-flow agreement with investment firm Castlelake, L.P. to sell consumer loans originated through its platform.
Under the multi-year deal, funds managed by Castlelake have committed to buy up to $4 billion of consumer loans over the next 24 months. It is the largest forward-flow arrangement between the two companies to date, Upstart said.
Castlelake has purchased loans from Upstart since 2023. The firm, which focuses on asset-based private credit, said it has invested about $29 billion since 2015 in consumer and small-business loan originators.
On the Nasdaq, shares of Upstart are currently losing 1.30 percent, changing hands at $27.46.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Upstart Signs $4 Bln Loan Sale Deal With Castlelake

Key Points
Upstart continued to deliver strong top-line growth in 2026.
Concerns about declining take rates and margins pushed the stock lower.
Dave Girouard surprised investors by stepping down as CEO.
Upstart's (NASDAQ: UPST) business has come a long way in recent years. The fintech stock was one of the biggest losers in the post-pandemic bear market as its profits evaporated in 2022, but since then, it has regrouped, returned to generally accepted accounting principles (GAAP) profitability, and delivered strong growth.
However, that hasn't been enough to please investors, at least so far this year, and concerns about its business model and the departure of CEO Dave Girouard have hung over the company, despite its continuing to deliver solid results.
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As a result, the stock fell 19% in the first six months of 2026, according to data from S&P Global Market Intelligence. As you can see from the chart below, shares fell sharply through the first quarter before recouping some of those losses in Q2.
What happened with Upstart this year
Upstart actually jumped out of the gate, scoring a buy rating from Truist early in the year, crediting its advantage over traditional credit scoring and its AI foundation. However, by the end of January, the stock was in the red.
Upstart tumbled in February as it gave investors two bitter pills to swallow. First, it said that co-founder Dave Girouard was stepping down as CEO, to be replaced by co-founder and then-CTO Paul Gu, and it reported fourth-quarter earnings, delivering solid results but offering underwhelming guidance.
Overall growth in the quarter was impressive, with loans originated up 86% to 455,788 and revenue up 35% to $296.1 million as the company targets smaller loans and lower-risk borrowers, which offer less of a premium and have led to lower take rates. That figure beat estimates at $288.6 million.
On the bottom line, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose from $38.8 million to $63.7 million, and it reported a GAAP profit per share of $0.17.
However, the company guided 2026 adjusted EBITDA margin to fall slightly from 22% to 21%, and investors also seemed worried about declining take rates, suggesting its lending partners aren't paying as much as they previously were. The stock fell 15% on Feb. 11 on the news and continued to decline from there.
The stock began to come back in April, popping 13% on April 15 in response to comments from Morgan Stanley that downplayed the risks in the private credit market, which have weighed on Upstart.
Shares pulled back again following the first-quarter earnings report in May, as it delivered solid growth but similar concerns persisted, including its declining take rate. More importantly, its adjusted EBITDA margin fell from 20% to 13%, driven by higher sales and marketing expenses, and its net loss widened from $2.4 million to $6.6 million.
What's next for Upstart
The company maintained its guidance for the year in the Q1 report, and CEO Paul Gu bought 50,000 shares of the stock the following week in May, which is typically a bullish signal.
Management also offered guidance through 2028, calling for a compound annual growth rate of around 35% during 2025-2028 and an adjusted EBITDA margin of 28%. If it can execute on that, the stock should move higher, but this is still a risky stock, especially considering that interest rates are now expected to move higher by the end of the year.
Should you buy stock 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 $364,562!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,247,668!*
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*Stock Advisor returns as of July 22, 2026.
Jeremy Bowman has positions in Upstart. The Motley Fool has positions in and recommends Truist Financial and 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.

Why Upstart Stock Lost 19% in the First Half of 2026

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*Stock prices used were the afternoon prices of July 11, 2026. The video was published on July 13, 2026.
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Parkev Tatevosian, CFA has positions in Pinterest and The Trade Desk. The Motley Fool has positions in and recommends Pinterest, Qualcomm, Symbotic, The Trade Desk, and Upstart. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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*Stock prices used were the afternoon prices of July 4, 2026. The video was published on July 6, 2026.
Should you buy stock 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 $418,761!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,195,804!*
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Parkev Tatevosian, CFA 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. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Upstart Stock Analysis: Buy or Sell This AI Stock?

Key Points
Upstart’s business was nearly derailed by soaring interest rates in 2022 and 2023.
It’s learned from its past mistakes, but higher rates could still throttle its growth.
Upstart (NASDAQ: UPST), an AI-powered online lending marketplace, went public at $20 in Dec. 2020. It soared to a record high of $390 in Oct. 2021, but it now trades at about $31. Let's see why Upstart's stock pulled back -- and why it could struggle if interest rates stay high.
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Why is Upstart dependent on low interest rates?
Upstart isn't a traditional lender. It's an AI-powered middleman that approves loans for banks, credit unions, and auto dealerships. Rather than analyzing traditional data like an applicant's credit score, credit history, or annual income, Upstart reviews non-traditional data points -- including previous jobs, standardized test scores, and GPAs -- to approve a wider range of loans for younger and lower-income applicants with limited credit histories. It generates most of its revenue by taking a referral fee on each approved loan.
Upstart's growth can be gauged by its originated loans, conversion rate (the percentage of inquiries that lead to approved loans), contribution margin (the percentage of its fees it retains as revenue), and total revenue growth. Its business flourished in 2020 and 2021, when interest rates were near zero, but floundered in 2022 and 2023 after the Fed's 11 consecutive rate hikes.
Metric
2020
2021
2022
2023
2024
2025
Originated Loans Growth
40%
338%
(5%)
(59%)
28%
115%
Conversion Rate
15.2%
24%
14.1%
9.7%
15.1%*
19.4%
Contribution Margin
46%
50%
49%
63%
60%
56%
Revenue Growth
42%
264%
(1%)
(39%)
24%
64%
In 2024 and 2025, Upstart's growth accelerated again after six interest rate cuts. But in 2026, the Fed left its rates unchanged at 3.50%-3.75% through four Federal Open Market Committee (FOMC) meetings. With inflation hitting a three-year high in May, many analysts now anticipate rate hikes instead of rate cuts in the second half of the year.
What's next for Upstart?
In its first-quarter report in early May, Upstart reiterated its prior outlook for 40% revenue growth in 2026 and a 35% CAGR from 2025 to 2028. It also expects its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin to improve from negative 21% in 2026 to positive 25% in 2028. That's an optimistic outlook, but its stock has declined nearly 50% over the past 12 months, presumably because investors are bracing for rate hikes.
Upstart is in a stronger position than it was back in 2022 and 2023, thanks to more than $4 billion in committed forward-flow capital from alternative asset managers. Even if interest rates rise, those institutions are obligated to keep buying Upstart's loans for up to 24 months. It also generates more of its revenue from secure, collateralized auto and HELOC loans rather than the unsecured personal loans that nearly sank its business three years ago.
With an enterprise value of $3.4 billion, Upstart still looks cheap at three times this year's sales. Unfortunately, it will remain out of favor until the fear of interest rate hikes subsides.
Should you buy stock 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 $417,305!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,293,148!*
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*Stock Advisor returns as of June 22, 2026.
Leo Sun 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.

Upstart's AI Lending Model Faces Its Toughest Test if Rates Stay High

Key Points
Nu is getting full bank charters in Brazil and Mexico, enhancing its capabilities while providing greater stability.
It's expanding to the U.S. and has global ambitions.
It's using AI to identify good borrowers without increasing risk.
Nu Holdings (NYSE: NU) is an exciting digital bank based in Brazil. Although the stock soared last year, it's dropped in 2026 and is down 22% year to date.
However, it might have bottomed out for the year, and it has several tailwinds that could send it higher. Here are three catalysts for Nu stock in 2026.
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1. It's getting bank charters in Brazil and Mexico
Nu operates a financial app in Brazil, Mexico, and Colombia. It has 135 million users as of the end of the first quarter, 115 million of them in its home country, Brazil, where it's the largest private financial institution. It has become popular among mass users who are often closed out of the banking system in Brazil, which has high barriers to entry. It has released several products targeting more affluent consumers, and that segment is also growing.
It has achieved this level of engagement and popularity, with more than half of the adult population in Brazil using the platform, without a full bank charter. Instead, it has operated as a payments, credit, financing, and investment company. Obtaining a full bank charter, which it has applied for, will let it offer more products and achieve greater stability, as it can operate all of its services under one umbrella instead of applying for various licenses and permits in different areas. Since it's getting closer to saturation among new users, this opens up an opportunity to cross-sell and deepen engagement with its existing user base.
It's also getting a bank charter in Mexico, where it still has just a fraction of the adult population at 15 million users.
2. It's getting a bank charter in the U.S.
Management has implied that it would continue to expand into new regions, and it recently received a conditional bank charter to operate in the U.S. It hasn't provided many details about this new venture yet, and it's still waiting for full approval from regulators. During the next 12 to 18 months, it needs to fully capitalize the bank in accordance with regulations.
Once approved, it plans to offer the full gamut of banking products, including deposit accounts, credit cards, and other lending products through its app. The U.S. population of 342 million is almost as big as the populations of Brazil, Mexico, and Colombia combined, providing a vast new market opportunity.
In March, it announced a partnership with soccer franchise Inter Miami CF and named its new stadium Nu Stadium. The company said that it's a "significant milestone in its international growth strategy and reinforces its long-term commitment to the United States," and the partnership is meant to build its brand as it gets started in the U.S.
Given its roots, it's likely to target the large Spanish-speaking population in the U.S. South. Management also said this is part of Nu's "global mindset," and more could be on the way.
3. It's using AI to make better lending decisions
Artificial intelligence (AI) is proving its value in many different areas, and one field where it's disrupting norms is in credit scoring. Upstart Holdings and Pagaya Technologies are both making waves as AI credit-scoring platforms, and Nu has its own foundation model called Nuformer that uses AI and machine learning to approve more borrowers without increasing risk. Its newest model reduced risk by 70% for the same population as previous models.
That drives financial inclusion, one of its missions, as well as increased revenue and improved credit quality, which has been an issue for investors recently. The company believes that its immense data store from its highly engaged users gives it an edge in identifying good borrowers, and there have already been tangible results.
In the 2025 fourth quarter, Nu posted a half-percentage-point increase in credit card purchase volume market share in Brazil, the highest absolute increase in the past 10 years for any bank. The credit book increased 40% year over year, and the write-off rate was steady at 2.8% to 2.9%. These are incredible results and could get even better.
Nu stock is on sale right now, but it could soar in the second half of the year.
Should you buy stock in Nu Holdings right now?
Before you buy stock in Nu Holdings, 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 Nu Holdings 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 $424,531!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,273,016!*
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*Stock Advisor returns as of June 18, 2026.
Jennifer Saibil has positions in Nu Holdings. The Motley Fool has positions in and recommends Nu Holdings and Upstart. The Motley Fool recommends Pagaya Technologies. 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.

3 Catalysts That Could Send Nu Stock Soaring This Year

Key Points
OneMain maintains a robust physical presence with over 1,300 branches and consistent profitability in the nonprime lending market.
Upstart uses proprietary artificial intelligence to automate credit decisions, delivering rapid revenue growth through a network of banking partners.
Is the established branch-based lender or the tech-driven marketplace the better choice for your portfolio?
Should you prioritize the steady returns of an established lender or the high-growth potential of an AI disruptor? Comparing OneMain (NYSE:OMF) and Upstart (NASDAQ:UPST) helps determine which fits your individual goals.
OneMain focuses on personal loans for nonprime borrowers through a massive network of physical branches and digital tools. Upstart operates as a technology platform that uses artificial intelligence to help banks and credit unions price risk more accurately. Both companies facilitate consumer credit but utilize radically different business models to reach their target markets.
The case for OneMain
OneMain provides personal loans and credit products to nonprime consumers through its extensive network of 1,300 branches and online platforms. The company operates in the consumer credit market and is a notable player among financial stocks. By focusing on personalized service and a local presence, it reaches borrowers who may have limited options through traditional banking channels.
For FY 2025, revenue reached nearly $6.2 billion, representing an increase of roughly 9.1% over the previous year. The company reported net income of approximately $783 million, resulting in a net margin of nearly 12.5%. This performance reflects a steady recovery in earnings compared to the prior two fiscal years.
As of its December 2025 balance sheet, the debt-to-equity ratio was roughly 6.7x. This metric indicates that the company's total debt is approximately 6.7 times its shareholders’ equity. Free cash flow, which represents cash from operations minus capital expenditures, reached nearly $3.1 billion in FY 2025.
The case for Upstart
Upstart operates an AI-driven marketplace that connects consumers with more than 100 banks and credit unions to facilitate various loan products. The company relies heavily on a small group of partners, with three entities originating roughly 83% of its loans and contributing about 61% of total revenue. Customer concentration like this adds a layer of risk to the business.
In FY 2025, revenue surged by nearly 59% to reach nearly $1.1 billion. This growth allowed the company to return to profitability, reporting net income of roughly $53.6 million. This resulted in a net margin of close to 5.0%, a significant improvement over the net losses recorded in the previous two years.
As of December 2025, the company maintained a debt-to-equity ratio of approximately 2.3x. Its current ratio, which measures the ability to cover short-term liabilities with short-term assets, was roughly 3.0x. For the fiscal year, Upstart reported negative free cash flow of approximately -$166.1 million.
Risk profile comparison
OneMain faces significant risks from adverse macroeconomic conditions that could disproportionately impact its nonprime borrower base. The company also navigates intense competition from larger financial institutions, such as JPMorgan Chase (NYSE:JPM), which have a lower cost of funds. Furthermore, strict oversight from the Consumer Financial Protection Bureau could lead to increased compliance costs or regulatory penalties.
Upstart is highly dependent on institutional investors and a few key lending partners to maintain its loan volume and revenue. Its proprietary AI models pose a risk of pricing errors if they fail to adapt quickly to rapid economic shifts. Additionally, the company faces growing competition from other financial technology firms such as SoFi Technologies (NASDAQ:SOFI).
Valuation comparison
OneMain currently offers a significantly lower Forward P/E than its rival, making it a potentially attractive option for value-oriented investors.
Forward P/E
7.8x
35.1x
16.6x
P/S ratio
1.4x
3.1x
Sector benchmark uses the SPDR XLF sector ETF.
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?
While both companies take radically different approaches to providing loans, each business is ultimately dependent on the same thing: the financial health of the average American consumer.
As a business with a greater focus on subprime lending, OneMain is more susceptible to the weaker part of the ‘K-shaped’ economy, where the very wealthiest are thriving while everyone else is in worse financial condition. While that can boost the need for loans, it also heightens the risk of loan defaults by OneMain borrowers. The company hedges this a bit by packaging and selling batches of its loans, such as auto receivables, to other parties.
Upstart, meanwhile, competes for a slightly more upmarket customer base with AI-powered lending models designed to provide near-instantaneous loan offers that accurately reflect risk for the lender. Don’t let the AI nature of the process allow you to overlook what could be very real risks to the modeling: AI may not be able to accurately price loans in changing economic conditions, and, in the long run, regulators may take a closer look at AI lending for bias, given the large amounts of information such systems may consume, and which might violate fairness in lending standards
OneMain is cheaper on a valuation basis, but the company saw an uptick in delinquencies in the first part of the year. While it expects that to decline, it’s an immediate risk. Upstart, meanwhile, is likely more insulated given its slightly higher-quality consumer base. The nearly 36% revenue rise expected for 2026, to more than $1.4 billion, compared to OneMain’s expected 10% revenue rise, gives Upstart the nod.
Should you buy stock in OneMain right now?
Before you buy stock in OneMain, 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 OneMain 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 $424,531!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,273,016!*
Now, it’s worth noting Stock Advisor’s total average return is 940% — a market-crushing outperformance compared to 209% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
JPMorgan Chase is an advertising partner of Motley Fool Money. Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase and 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.

OneMain vs. Upstart: Which Consumer Loan Stock Is a Better Buy in 2026?

Key Points
Upstart Holdings has bounced back from its early 2020s slowdown, as seen by the AI lender's continued strong loan origination growth.
However, margins aren't rising in line with increasing revenue, and there's another potential hurdle to consider.
Pricey at 35 times forward earnings, investors should wait for lower prices or promising updates regarding key risks before buying.
Over the past five years, Upstart Holdings (NASDAQ: UPST) has experienced roller-coaster price action. After initially surging following its public market debut, high interest rates and falling loan demand led to a steep drop in revenue and ballooning losses.
In the years since, however, the artificial intelligence lending technology company's revenue has bounced back. Upstart has also become consistently profitable. However, with shares still down by over 92% from their high-water mark, Upstart has a long way to go before making even a partial recovery. A further rebound for this fintech stock remains possible, but major uncertainties remain.
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Upstart and its latest results
On May 5, Upstart released results for the first quarter. As seen in the results, the AI lender's growth stream continues unabated. Transaction volumes were up 77%, with total originations coming in at $3.4 billion, a 61% increase from the prior year's quarter.
Upstart operates like a marketplace. Financial institutions partner with the company, utilizing its AI models and cloud-based application to assist with loan underwriting and risk assessment. The company has yet to enter the mortgage space, but it provides its technology for auto loans, personal loans, and home equity lines of credit.
Alongside promising results for the prior quarter, the company also provided updates that may bode well for this growth stock. For instance, Upstart reiterated its 2026 guidance, with management calling for $1.4 billion in revenue and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $294 million, representing a 34% and 27.5% increase, respectively, compared to 2025 results.
To top things off, on the earnings conference call, CEO Paul Gu reiterated Upstart's plans to continue pursuing a national charter, while also noting that Upstart plans to continue to "rely primarily on third-party capital." Rather than morph into a bank, as some fintechs such as SoFi Technologies have done, Upstart's motives for obtaining a bank charter have more to do with enabling it to expand its presence to all 50 states and reduce compliance and back-office costs.
Top risks to the bull case
Although top-line growth was strong, there were also some issues with Upstart's results. The company reported negative operating income and net income, both of which increased from the prior year's quarter.
Operating losses came in at $7.5 million, up from $4.5 million during Q1 2025, while net losses came in at $6.6 million, up nearly threefold from Q1 2025. Even on an adjusted EBTIDA basis, Upstart was less profitable year over year. Last quarter, adjusted EBITDA came in at $40.5 million, slightly below the $42.6 million in EBITDA reported in Q1 2025.
Moreover, given uncertainty about Upstart's path to greater profits, it's not surprising that this stock's short interest remains high, at around 32% of the outstanding float. Thanks to the post-COVID economy's relative soft landing, Upstart's AI-based underwriting models have yet to get the sort of stress test needed to determine their resilience.
Only time will tell whether Upstart can raise margins as strong top-line growth continues. The same holds true for the credit performance of its loan originations. Trading for 35 times forward earnings, Upstart isn't exactly cheap. Either wait for lower prices or for positive developments on these key uncertainties before buying Upstart stock.
Should you buy stock 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 $445,672!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,280,566!*
Now, it’s worth noting Stock Advisor’s total average return is 948% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of June 10, 2026.
Thomas Niel 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.

Is Upstart's AI Lending Comeback the Real Deal?

Key Points
Upstart stock is down 26% year to date.
The fintech company announced plans to apply for a national bank charter, which would allow it to fund loans.
The company remains unprofitable and has had rising expenses.
Not all artificial intelligence stocks have been going through the roof in recent years. One AI-fueled fintech, Upstart Holdings (NASDAQ: UPST), has had a hard time building any positive momentum.
And it's not because of its AI or technology, or even the unique service it offers to its customers. The risk, in part, comes from its business model, which it is looking to tweak.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Upstart was one of the first AI-fueled fintech companies to burst on the scene in late 2020, during the post-COVID technology boom. It intrigued investors with its technology platform, which deploys AI to handle loan requests. Using some 1,500 different data points, the technology quickly examines a loan application and either approves or denies it in minutes.
Upstart generates most of its revenue from fees, with most fees coming from its online marketplace, where it accepts loan requests, its AI examines them, and seeks to find a lender. It also has a software-as-a-service (SaaS) revenue stream, selling the software to banks and lenders for a fee so they can embed it in their own systems.
Banking on a bank charter
The major risk for Upstart is securing loans from its bank and institutional partners, particularly during a challenging, high-interest-rate environment when lenders tighten their credit standards and pull back on funding riskier loans. In the past, this has resulted in fewer loan originations, which translated to decreased revenue.
Fortunately, that has not been a problem for Upstart as of late, as its originations have been strong. In the first quarter, Upstart grew loan originations by 61% year over year and transaction volume by 77%. That resulted in a 44% year-over-year rise in revenue.
But Upstart management just took a major step toward reducing some of its risk, applying for a bank charter.
In March, Upstart announced plans to apply for a national bank charter, which would allow it to accept deposits and use those deposits to fund its loans. The company would still use its marketplace to source loans to banks and institutional investors, but it would also have the ability to fund loans itself and collect interest on those loans. It not only provides an additional revenue stream but also reduces the company's risk of relying solely on third-party funding sources.
If the application is approved, Upstart is planning to launch the bank in early 2027.
Big spenders
Upstart stock has risen about 18% since that March 10 bank charter announcement, to around $32 per share, but it's still down roughly 26% year to date and 33% over the past year.
Despite its surge in revenue and originations, Upstart still struggles to generate profits due to its massive spending.
In the first quarter, expenses shot up 45% year over year, with sales and marketing costs jumping 76% and engineering and product development expenses increasing 38%. Overall, it led to a net loss of $7 million or $0.07 per share, up from a net loss of $0.03 per share a year ago this quarter.
So while the bank charter could go a long way toward reducing its funding source risk, Upstart also needs to show investors that it can manage expenses and maintain profitability.
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Dave Kovaleski 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.

Upstart's Biggest Risk Isn't Its AI Models. It's Who Funds the Loans.

SoFi Technologies SOFI continues to demonstrate impressive growth across both its member base and product ecosystem, reinforcing the effectiveness of its innovation-led strategy and brand-building efforts. Members increased from 5.2 million in 2022 to 14.7 million in the first quarter of 2026, reflecting a strong 38% compound annual growth rate. Product growth has also remained robust, rising from 7.9 million in 2022 to 22.2 million in the first quarter of 2026, representing a 37% compound annual growth rate.
The company added 2.4 million new members in 2023, 2.8 million in 2024, and 3.6 million in 2025. In the first quarter of 2026 alone, SoFi added another 1.1 million members. Product additions have remained equally strong, with 3.5 million new products added in 2023, 4.1 million in 2024, and 5.5 million in 2025. During the first quarter of 2026, the company added another 1.8 million products.
The steady rise in both members and products indicates that SoFi is not only attracting new users but also increasing engagement through cross-selling opportunities across its ecosystem. The company’s diversified offerings, spanning lending, financial services and technology platforms, continue to strengthen customer retention and monetization opportunities. As consumers increasingly shift toward integrated digital financial platforms, SoFi appears well-positioned to benefit from long-term fintech adoption trends and rising demand for seamless digital banking experiences.
Relevant Industry Peers
LendingClub LC remains one of the more closely followed digital lending peers within the fintech industry. Like SoFi, LendingClub has focused on building a more diversified financial platform beyond traditional consumer lending. However, LendingClub continues facing greater exposure to credit cycle sensitivity and consumer loan demand fluctuations.
Upstart Holdings UPST is another relevant competitor benefiting from technology-driven lending and financial automation trends. Similar to SoFi, Upstart uses artificial intelligence and digital infrastructure to improve the delivery of financial products and underwriting efficiency. Still, Upstart remains more heavily tied to loan origination cycles and macroeconomic credit conditions.
SOFI’s Price Performance, Valuation, and Estimates
The stock has fallen 41.5% over the past six months compared with the industry’s 12.4% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, SOFI trades at a forward price-to-earnings ratio of 25.64X, well above the industry’s 10.05X. It carries a Value Score of F.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for SOFI’s 2026 earnings has remained unchanged over the past 30 days.
SOFI stock currently carries a Zacks Rank #4 (Sell).
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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.

Indicator	TTM Median
P/E	62.56 13.44
Price/Sales	3.26 2.20
P/B	4.63 1.26
P/FCF	0.00 10.82

Indicator	TTM Median
ROE	6.67 10.93
ROA	1.77 1.25
ROI	0.00 7.69
Net Worth	3.46 1.04
Quick Ratio	0.00 1.40
Current Ratio	0.49 0.98

Indicator	TTM Median
Net Profit Margin	4.39 17.42
Operating Margin	3.51 24.35
Gross Margin	82.16 71.15
Return on tangible equity	7.33 12.73

Indicator	TTM Median
EPS	-0.02 0.71
EPS Forecast	0.17 0.72
Revenue	308.00M 89.00M
Gross Profit	253.00M —
EBITDA	0.00 —

Upstart Holdings, Inc.

Recent quarterly and TTM performance

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