Upstart's AI-Driven Comeback: From Near-Death to Wall Street Darling

Hedge fund manager Eric Jackson thinks this AI stock can be his next back-from-the-dead tech pick

Investors may want to keep an eye on this artificial intelligence stock resurrecting itself from the dead, according EMJ Capital's Eric Jackson. "We're obviously staring down rate cuts, so I think we've hit an inflection point with [ Upstart ] where they are now going to have these tailwinds behind them," the hedge fund manager told CNBC's "Money Movers" on Monday. "I'm not saying they're going to $400 next week, but the worst is behind them from a macro sense." Jackson also highlighted Upstart's strong earnings, signs of "no pickup" in delinquencies and a quarter-on-quarter revenue growth guide as reasons he's bullish on the AI lending platform. The last time Upstart offered a similar forecast, the stock doubled, he noted. UPST 1Y mountain Upstart shares over the last year To be sure, Upstart has been on a volatile ride since going public in December 2020. Shares slumped about 91% from October 2021 highs, and are down 14% so far this year, following 209% surge in 2023. Jackson has made some notable calls on turbulent names in the past. He remained bullish on Carvana even as the used car retailer was on the verge of filing for bankruptcy in 2022. That stock has rallied to nearly $136 a share from a closing low of $3.72 in December 2022. Shares have slumped 63% from their August 2021 highs but have surged 153% this year. "They're a much different company than they were going into Covid," he said. "They're balancing growth with profitability" and catering to lower-end consumers.

What's Going On With Upstart (UPST) Stock? - Upstart Hldgs (NASDAQ:UPST)

The stock rose last week after strong Q2 results and higher-than-expected Q3 revenue guidance. Upstart Holdings Inc UPST shares are down 5.2% to $34.36 Monday afternoon, pulling back after a 43% gain over the last five trading days. The stock gained last week after the company reported better-than-expected second-quarter financial results and issued third-quarter revenue guidance above estimates. Upstart reported a quarterly loss of 17 cents per share, which was better than the expected 39 cents loss. Revenue for the quarter was $128 million, surpassing estimates of $124.54 million. The company originated 143,900 loans totaling $1.1 billion, a 6% decrease from the previous year, but improved its conversion rate from 9% to 15%. CEO Dave Girouard highlighted advances in AI, a renewed funding supply, and operational efficiency as key factors in Upstart's positive outlook. For third-quarter 2024, the company anticipates revenue of about $150 million, exceeding the $124.5 million estimate. Read Also: What's Going On With Alibaba Stock? How To Buy UPST Stock Besides going to a brokerage platform to purchase a share - or fractional share - of stock, you can also gain access to shares either by buying an exchange traded fund (ETF) that holds the stock itself, or by allocating yourself to a strategy in your 401(k) that would seek to acquire shares in a mutual fund or other instrument. For example, in Upstart Hldgs case, it is in the Financials sector. An ETF will likely hold shares in many liquid and large companies that help track that sector, allowing an investor to gain exposure to the trends within that segment. According to data from Benzinga Pro, UPST has a 52-week high of $49.62 and a 52-week low of $19.84. Market News and Data brought to you by Benzinga APIs