Bet on a Heavily Favored Lending Platform with Upstart Stock

  • Upstart (UPST) stock seems to have hit rock bottom recently.
  • However, the stock could be poised for a comeback as Upstart’s modern lending platform appears to be in high demand.
  • Investors should try a small, speculative stake in Upstart shares.
In this photo illustration the Upstart (UPST) logo seen displayed on a smartphone screen
Source: rafapress / Shutterstock.com

Headquartered in California, Upstart (NASDAQ:UPST) has a vision of upending traditional bank underwriting practices with an artificial intelligence (AI)-powered lending platform. UPST stock’s downtrend may be over soon, and investors can bulk up their tech-focused portfolio with a few Upstart shares.

There’s no denying that financial stocks and technology stocks have been volatile lately. Upstart fits into both of those categories, so it’s not difficult to see why the share price is down from its peak.

On the other hand, Upstart’s disruptive approach to fintech may be appreciated on Wall Street in the near future. Indeed, a buy-low and sell-high strategy with UPST stock could pay off handsomely.

As we’ll see, a number of financial institutions clearly see the value that Upstart provides. Plus, a well-known enterprise cloud company is collaborating with Upstart, to the benefit of both companies and their stakeholders.

UPST Upstart $77.13

What’s Happening with UPST Stock?

Believe it or not, UPST stock has flown as high as $401.49 during the past 12 months. This wasn’t sustainable, and the share price has come back down to a more reasonable level.

It’s not emotionally easy to buy a stock after it has fallen sharply, but that’s the name of the game for true contrarians. If you still believe that Upstart has a solid business model, then this would be a time to add some shares, not panic-sell them.

After all, Upstart just keeps on finding new partners to work with, and that’s a positive sign. In one example, Upstart is partnering with New Hampshire-based Bellwether Community Credit Union to provide AI-powered personal loans to consumers residing or working in New Hampshire and Essex and Middlesex counties in Massachusetts.

Also, Upstart will provide similar services in a collaboration with Colorado not-for-profit financial cooperative Red Rocks Credit Union. Red Rocks has over 16,000 members and $360 million in assets.

On top of all that, Upstart was selected for similar services by Firstmark Credit Union. That’s the oldest state-chartered credit union in San Antonio, Texas, and it serves nearly 100,000 members.

A Digital-First Lending Experience

These are all value-added partnerships, no doubt. Yet, Upstart’s most headline-grabbing recent collaboration would be with none other than enterprise cloud powerhouse Salesforce (NYSE:CRM).

Not long ago, Upstart announced Upstart AI Lending for Salesforce on Salesforce AppExchange. This will enable bank and credit union personnel to initiate an AI-enabled digital lending experience for customers across through multiple modalities. These could include in- person interactions, phone calls or scanning a QR code.

The press release touted the benefits of this partnership, stating, “By leveraging Upstart’s AI platform, Upstart-powered banks and credit unions can have higher approval rates and lower loss rates while simultaneously delivering the digital-first lending experience their customers demand.”

It’s another example of how Upstart is helping banks and credit unions modernize their lending practices. For example, Michael Lock, SVP of Lending Partnerships for Upstart, pointed out that Upstart AI Lending for Salesforce will allow financial institutions to have access to a “better, 360-degree view of the customer.”

This certainly sounds like a win-win for everyone involved, including the customers. Really, it should only be a matter of time before Wall Street learns to love Upstart again.

What You Can Do Now

Investing in UPST stock requires a great deal of patience and resolve. There’s no way to predict if or when the share price will stage a turnaround.

For the time being, feel free to take advantage of the depressed share price. A small position in Upstart is reasonable now as the company continues to innovate and disrupt fintech as we know it.

On the date of publication, David Moadel 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.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.


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