Perhaps one of the most successful initial public offerings (IPOs) of late-2020 has to be Upstart (NASDAQ:UPST). Indeed, shares of UPST stock were listed at $20 per share, for a valuation of $1.45 billion last year. Currently, shares of UPST stock have surged to more than $210 per share, a 10-bagger for investors in less than a year.
This artificial intelligence (AI) company has seen significant interest in the company’s core product offering. Upstart uses a proprietary AI algorithm to provide more accurate credit scores for lenders. By matching up younger, high-income individuals with credit products that more accurately reflect their true risk, Upstart has seen a boon in business as lenders seek to grow their loan books.
Much of Upstart’s success has come as a result of the difficulty that traditional credit score models provide certain investors. Accordingly, many investors have jumped onto Upstart’s business model as a way of managing inequality in today’s economy.
According to Upstart’s website, the company’s focus is on improving the price of borrowing for average Americans. “Money is a fundamental ingredient of life, and unless you’re one of the few percent of Americans with significant wealth, the price of borrowing affects you every day. Throughout history, affordable credit has been central to unlocking mobility and opportunity.”
Accordingly, it’s perhaps no surprise that influential talking heads such as Jim Cramer have gotten bullish on UPST stock. Let’s dive into a few things investors may want to know about this intriguing AI play.
UPST Stock Soaring on Increased Investor Interest
- UPST went public in December 2020 at a price of $20 per share.
- Since then, this is a stock that has generated significant retail investor interest.
- Upstart’s recent massive spike has been a result of a massive earnings beat last week.
- The company reported revenue growth of more than 1,000%, a number reserved for the highest-growth stocks.
- Additionally, Upstart blew away bottom-line expectations. The company reported 50 cents per share for the first half of this year.
- These earnings numbers are far better than analysts expected and pave the way for UPST stock to grow into its valuation.
- Investors banking on UPST stock are hopeful Upstart can fully disrupt the existing credit-score-modeling industry.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
