Latest news with #Upstart
Yahoo
12 hours ago
- Business
- Yahoo
Billionaires Are Buying 2 Artificial Intelligence (AI) Stocks That Wall Street Analysts Say Can Soar Up to 240%
Several billionaire hedge fund managers bought shares of Palantir and/or Upstart in the first quarter -- stocks where certain analysts anticipate substantial upside. Palantir is successfully tapping demand for artificial intelligence (AI) with government and commercial customers, but the stock trades at a very expensive valuation. Upstart is generating attractive returns for lenders by helping them quantify credit risk with artificial intelligence, and the stock trades at a very reasonable valuation. 10 stocks we like better than Palantir Technologies › Large asset managers are required to disclose their equity holdings in quarterly Forms 13F. Investors can use those filings to track which stocks billionaires are buying. For instance, several hedge fund managers bought Palantir Technologies (NASDAQ: PLTR) and Upstart (NASDAQ: UPST) in the first quarter, as detailed below: Chris Rokos of Rokos Capital Management bought 55,809 shares of Palantir, starting a new position. Philippe Laffont of Coatue Management added 521,887 shares of Upstart, increasing his stake 150%. Ken Griffin of Citadel Advisors bought 902,486 shares of Palantir, increasing his position 204%. He also added 202,094 shares of Upstart, increasing his stake 618%. Paul Tudor Jones of Tudor Investment bought 149,191 shares of Palantir, increasing his position 573%. He also added 13,729 shares of Upstart, increasing his stake 28%. Importantly, certain Wall Street analysts see tremendous returns ahead for shareholders. Dan Ives at Wedbush Securities expects Palantir to be a $1 trillion company within three years, which implies 240% upside from its current market value of $294 billion. And Dan Dolev at Mizuho Securities recently set Upstart with a target price of $85 per share, which implies 85% upside from its current share price of $46. In its earliest days, Palantir built bespoke data analytics solutions for the U.S. intelligence community. But the company now focuses on developing modular software platforms for customers across the commercial and government sectors. Its core products (Gotham and Foundry) let customers integrate complex information and extract nuanced insights with machine learning models and analytical tools. Importantly, in 2023, Palantir introduced an adjacent Artificial Intelligence Platform (AIP) that adds support for large language models and natural language processing. In other words, AIP lets organizations infuse their data analytics workflows with generative AI. Forrester Research recently recognized Palantir as a technology leader in artificial intelligence and machine learning platforms. Palantir looked strong in the first quarter. Customer count increased 39% to 769, and the average spend per existing customer increased 24%. In turn, revenue rose 39% to $884 million, and non-GAAP (generally accepted accounting principles) earnings jumped 62% to $0.13 per diluted share. Management attributed the strong performance to demand for its AI platform. Wall Street estimates Palantir's adjusted earnings will increase at 31% annually through 2026. That makes the current valuation of 270 times earnings look outrageously expensive. Investors can look at this stock in two ways: On one hand, I think Dan Ives is right in saying Palantir will be a trillion-dollar company eventually. On the other hand, I also believe the stock is due for a sharp correction. Patient investors comfortable with volatility can reconcile those opposing views by purchasing a very small position today. And if the stock drops sharply in the coming months, they can consider buying more shares at cheaper valuations. Upstart has developed a lending platform that leans on artificial intelligence to help banks and credit unions quantify credit risk more accurately than traditional credit scores. Its business benefits from a network effect in that every data point -- whenever a borrower makes or misses a payment -- makes its machine learning models more effective. Upstart reported solid financial results in the first quarter, beating expectations on the top and bottom lines. Loan originations more than doubled, revenue increased 67% to $2.1 billion, and non-GAAP net income was $0.30 per diluted share, up from a loss of $0.31 per diluted share in the same quarter last year. Nevertheless, Upstart stock crashed after the earnings report, likely because investors are worried about the lending environment. Tariffs imposed by the Trump administration threaten to slow economic growth, perhaps to the point of recession. That would be bad news for Upstart because banks are usually more conservative about extending credit during periods of economic upheaval. However, that creates an opportunity for patient investors. Wall Street expects adjusted earnings to grow at 195% annually through 2026, which makes the current valuation of 140 times earnings look reasonable. Even if the consensus is overly optimistic, Upstart still lets lenders approve more borrowers at lower rates, which should drive demand for its platform in the long run. Importantly, Upstart-powered loans originated in the last eight quarters have beat the two-year Treasury yield by an average of 8 percentage points. That very attractive return should bring more lenders to the platform and help the company capitalize on its $3 trillion addressable market. So, while shareholders may not see 85% returns in the next year, given the uncertain economic environment, I expect the stock to perform well over the next five years. Before you buy stock in Palantir Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Palantir Technologies 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 $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor's total average return is 978% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Trevor Jennewine has positions in Palantir Technologies. The Motley Fool has positions in and recommends Palantir Technologies and Upstart. The Motley Fool has a disclosure policy. Billionaires Are Buying 2 Artificial Intelligence (AI) Stocks That Wall Street Analysts Say Can Soar Up to 240% was originally published by The Motley Fool
Business Wire
a day ago
- Business
- Business Wire
Upstart CFO to Participate in Fireside Chat at the Morgan Stanley US Financials Conference
SAN MATEO, Calif.--(BUSINESS WIRE)--Upstart Holdings, Inc. (NASDAQ: UPST), the leading artificial intelligence (AI) lending marketplace, today announced that Sanjay Datta, Chief Financial Officer, will participate in a fireside chat at the Morgan Stanley US Financials Conference on Tuesday, June 10 at 3:15pm ET (12:15pm PT). A live audio webcast of the event will be available on Upstart's investor relations website at A replay of the webcast will be available for a limited period of time following the event. About Upstart Upstart (NASDAQ: UPST) is the leading AI lending marketplace, connecting millions of consumers to more than 100 banks and credit unions that leverage Upstart's AI models and cloud applications to deliver superior credit products. With Upstart AI, lenders can approve more borrowers at lower rates while delivering the exceptional digital-first experience customers demand. More than 90% of loans are fully automated, with no human intervention by Upstart. Founded in 2012, Upstart's platform includes personal loans, automotive retail and refinance loans, home equity lines of credit, and small-dollar 'relief' loans. Upstart is based in San Mateo, California.
Yahoo
a day ago
- Business
- Yahoo
Upstart CFO to Participate in Fireside Chat at the Morgan Stanley US Financials Conference
SAN MATEO, Calif., May 30, 2025--(BUSINESS WIRE)--Upstart Holdings, Inc. (NASDAQ: UPST), the leading artificial intelligence (AI) lending marketplace, today announced that Sanjay Datta, Chief Financial Officer, will participate in a fireside chat at the Morgan Stanley US Financials Conference on Tuesday, June 10 at 3:15pm ET (12:15pm PT). A live audio webcast of the event will be available on Upstart's investor relations website at A replay of the webcast will be available for a limited period of time following the event. About Upstart Upstart (NASDAQ: UPST) is the leading AI lending marketplace, connecting millions of consumers to more than 100 banks and credit unions that leverage Upstart's AI models and cloud applications to deliver superior credit products. With Upstart AI, lenders can approve more borrowers at lower rates while delivering the exceptional digital-first experience customers demand. More than 90% of loans are fully automated, with no human intervention by Upstart. Founded in 2012, Upstart's platform includes personal loans, automotive retail and refinance loans, home equity lines of credit, and small-dollar "relief" loans. Upstart is based in San Mateo, California. View source version on Contacts Investors Sonya Banerjeeir@ Press Tom Brennanpress@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Business
- Yahoo
Down 88%, Can This AI Stock Double in 5 Years?
This innovative fintech enterprise has developed an AI-powered platform that is aiming to disrupt the lending industry. While 1Q financial results were solid, the business is not only consistently unprofitable, but it faces cyclicality. Assuming earnings can soar in the years ahead, the current setup is favorable for risk-tolerant investors. 10 stocks we like better than Upstart › Investors can sometimes find worthwhile investment ideas if they look at the technological trends shaping the economy. One area that's getting a lot of attention is of course artificial intelligence (AI). Another industry niche to keep tabs on has been fintech. There's one stock that straddles both of these domains. And this might be very interesting for investors who have some money to put to work. The issue, however, is that the shares are 88% below their peak (as of May 23). If you buy this AI stock now, can it double your investment in five years? Let's take a closer look at this innovative business. Investors might already be familiar with Upstart (NASDAQ: UPST). As of this writing, the company carries a small market cap of $4.5 billion. However, don't let that distract you from what the business actually does. Upstart partners with different banks and credit unions, providing these lenders with its AI-powered credit assessment tool that management claims can approve more borrowers while lowering default risk. This is a win-win scenario for lenders that want to maximize revenue potential while also minimizing potential losses. To date, Upstart has helped to originate more than $42 billion worth of loans. And in the first quarter of 2025, the company said that 92% of its loans were fully automated from start to finish, requiring no human intervention. That's the power of technology. Historically, personal loans have been the bread-and-butter product line that Upstart offered, something that remains true today. But the business now offers auto loans and home equity lines of credit. These three lending markets have annual originations of more than $2 trillion in the U.S., which in theory opens a huge opportunity for Upstart. In 2021, Upstart shares skyrocketed 857% higher from the start of that year to their peak in mid-October. Bullish fever on Wall Street helped. But the company's monster growth was the key driving force. Upstart posted 264% and 338% gains, respectively, in revenue and transaction volume in 2021 compared to the year before. Higher rates in the past couple of years battered the company's financial performance. In 2023, Upstart's revenue tanked 39% year over year, and it registered a huge $240 million net loss. It's no wonder the stock fell precipitously. Things are starting to improve. Revenue and transaction volume surged 67% and 102%, respectively, in Q1. And for the full year of 2025, the leadership team expects to achieve positive net income in accord with generally accepted accounting principles (GAAP). That's definitely an encouraging sign for what has been a historically money-losing enterprise. The positive view is that Upstart's AI model should get better over time, particularly as it collects more data on borrowers and their repayment activity. Additionally, the business has now navigated rapidly rising interest rates, so it can be better prepared for when tighter macroeconomic conditions prevail in the future. The negative spin is that a possible recessionary scenario could not only restrict demand for loans but result in higher delinquencies. This is true for any lender. Operational performance is always dependent on how the broader economy is doing. The fact that Upstart operates in huge loan markets, in addition to its shares being so beaten down, unsurprisingly adds upside for the long term. The stock trades at a forward price-to-earnings (P/E) ratio of about 29. That looks very reasonable considering the average analyst forecast has diluted adjusted earnings per share going from a loss of $0.20 in 2024 to a positive $3.03 in 2027. To be clear, I wouldn't be surprised if the stock doubled between now and 2030. However, there needs to be a favorable economic backdrop and stellar execution by management -- factors that aren't guaranteed. So, it's worth pointing out that Upstart only makes sense for investors who have a high risk tolerance. There's a lot of uncertainty about the company's staying power. And the ability to generate rising profits, which is of the utmost importance, still must be proven. Before you buy stock in Upstart, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 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 $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $830,492!* Now, it's worth noting Stock Advisor's total average return is 982% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Neil Patel 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. Down 88%, Can This AI Stock Double in 5 Years? was originally published by The Motley Fool
Yahoo
a day ago
- Business
- Yahoo
1 Amazing Artificial Intelligence (AI) Stock Down 88% You'll Wish You'd Bought on the Dip in 2025
Upstart developed a unique artificial intelligence (AI) algorithm that could make traditional loan assessment methods obsolete. Upstart CEO Dave Girouard thinks the world's $25 trillion in annual loan originations could be assessed entirely by AI within the next decade. Upstart is leading that revolution, and its stock looks very attractive at the current price. 10 stocks we like better than Upstart › Upstart Holdings (NASDAQ: UPST) developed an artificial intelligence (AI) algorithm to originate loans on behalf of banks and financial institutions, and it appears to be far more effective at determining the creditworthiness of potential borrowers than traditional assessment methods. Upstart stock has nearly doubled over the past year, but it remains 88% below its all-time high, which was set during the tech frenzy in 2021. Demand for loans plummeted when interest rates soared in 2022 and 2023, which dealt a blow to the company's financial performance. But earlier this month, Upstart reported its financial results for the first quarter of 2025 (ended March 31), and they revealed extremely strong -- and accelerating -- revenue growth. Its stock is starting to look like a bargain, so here's why investors might wish they had bought the dip when they look back on this moment in the future. Fair Isaac's FICO credit scoring system has been central to the banking industry's assessment methods for over three decades. It uses five key metrics to determine a potential borrower's creditworthiness, including their existing debts and their repayment history, but Upstart thinks it's outdated. AI makes it possible to analyze high volumes of data in a matter of seconds, enabling Upstart's algorithm to consider over 2,500 metrics on every applicant. As a result, the company says it produces a more accurate overview of a borrower's ability to repay their loan. It approves double the number of applications than traditional assessment methods, and at a much lower average interest rate, while maintaining the same risk profile. Inside a traditional bank, it would take a human assessor days, if not weeks, to manually analyze as much data as Upstart's AI algorithm. The company is slowly phasing humans out of the process entirely -- during the first quarter of 2025, it originated 240,706 loans in total, and a staggering 92% of those approvals were fully automated thanks to AI. The bulk of Upstart's originations are unsecured personal loans, but it has a growing presence in automotive loans and also in the home equity line of credit (HELOC) segment. At the company's "AI Day 2025" earlier this month, CEO Dave Girouard hinted at a potential expansion into small business loans, industrial loans, and credit cards over the long term. Girouard said there are around $25 trillion worth of originations worldwide each year across all loan segments, which translates into a $1 trillion opportunity in terms of fee revenue. He believes all human assessment methods will be replaced by AI within the next decade, and since Upstart is leading the transformation, it could capture a sizable chunk of that value. Upstart generated $213 million in total revenue during the first quarter of 2025. It was a 67% increase from the same quarter in 2024, marking the fastest growth rate in around three years. It was also the third consecutive quarter in which that growth rate accelerated, highlighting the significant momentum in loan demand. As I mentioned earlier, Upstart originated 240,706 loans during the quarter. They had a face value of $2.1 billion, which was a whopping 89% jump compared to the value of the loans the company originated in the same quarter last year. That growth rate also accelerated for the third straight quarter. Upstart also made significant progress at the bottom line because its operating expenses only increased by 11.6%, which was a much slower pace than the increase in its revenue. The company still lost $2.4 million on a generally accepted accounting principles (GAAP) basis, but that was a 96.2% reduction from the $64.6 million net loss it delivered in the year-ago quarter. Upstart's preferred measure of profitability is adjusted earnings before interest, tax, depreciation, and amortization (EBITDA), which is a non-GAAP metric. It excludes one-off and non-cash expenses like stock-based compensation, so it's a good indicator of the actual cash the business is generating. It was positive to the tune of $42.5 million during the quarter, which was a big swing from the loss of $20.3 million from the year-ago period. When Upstart stock peaked in 2021, its price-to-sales (P/S) ratio surged to around 50, which was a completely unsustainable valuation. But the 88% decline in the stock since then, combined with the company's rapid revenue growth, has pushed its P/S ratio down to 5.7. That's a 35% discount to its long-term average of 8.8 dating back to when Upstart went public in 2020. Plus, management's guidance suggests the company will deliver a record $1.01 billion in revenue during the 2025 full year, which places the stock at a forward P/S ratio of 4.2: In other words, Upstart stock would have to double by the end of this year just to trade in line with its long-term average P/S ratio of 8.8. Considering the company's accelerating revenue growth, I think that's a real possibility. The decline in interest rates at the end of 2024 was a big tailwind for Upstart's business in the first quarter of 2025. Wall Street is anticipating two more cuts from the Federal Reserve this year (according to the CME Group's FedWatch tool), which should drive even more demand for loans. But the opposite is also true -- if the Fed cuts rates slower than expected, Upstart's recent momentum could temporarily hit a wall. But investors should stay focused on the long-term opportunity at hand, because if the number of loans assessed by AI continues to grow as CEO Dave Girouard expects, then Upstart stock could be poised for substantial upside over the next decade. Before you buy stock in Upstart, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 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 $653,389!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $830,492!* Now, it's worth noting Stock Advisor's total average return is 982% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 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 CME Group and Fair Isaac. The Motley Fool has a disclosure policy. 1 Amazing Artificial Intelligence (AI) Stock Down 88% You'll Wish You'd Bought on the Dip in 2025 was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
