Core Viewpoint - Upstart Holdings experienced significant volatility in its stock price, finishing the year down 29% despite strong business growth driven by a new AI model and falling interest rates, primarily due to rising credit risk concerns [1]. Business Performance - Upstart's revenue surged by 79% to $747.8 million through the first three quarters of the year, with a GAAP net income of $35 million, a notable recovery from a loss of $125.8 million in the same period the previous year [5]. - The company provided optimistic guidance for the fourth quarter, indicating expectations for continued growth and improved profitability [5]. Market Conditions - The stock saw gains of over 25% on two occasions during the year but ultimately lost those gains, reflecting the stock's volatility [2]. - Broader economic concerns, particularly rising credit risks and a weakening labor market, negatively impacted the stock towards the end of the year, despite management's confidence in their credit models [6][9]. Future Outlook - Heading into 2026, Upstart is expected to face similar economic challenges as in late 2025, with a weak labor market potentially leading to increased delinquencies in the credit market [9]. - However, Upstart's business is positioned stronger than it was during its decline in 2022, with its credit models performing well thus far [9].

Core Insights - MyPoint Credit Union has partnered with Upstart to enhance its personal loan offerings, aiming to reach a broader audience and provide a modern lending experience [1][2][3] Company Overview - MyPoint Credit Union is a member-driven financial institution based in San Diego, focusing on creating lending experiences tailored to the needs of contemporary borrowers [2][5] - Established in 1948, MyPoint offers a wide range of financial solutions, including everyday banking, consumer and real estate lending, and business services [6] Partnership Details - The partnership with Upstart allows MyPoint to utilize AI technology to streamline the lending process, enabling faster and more efficient loan approvals for creditworthy individuals [3][4] - MyPoint began participating in the Upstart Referral Network for personal loans in September 2025, providing tailored offers to qualified applicants [2] Upstart Overview - Upstart is recognized as a leading AI lending marketplace, connecting consumers with over 100 banks and credit unions, and automating more than 90% of its loans without human intervention [4] - Founded in 2012, Upstart's platform includes various loan products such as personal loans, automotive retail loans, and home equity lines of credit [4]

Core Insights - Upstart Holdings, Inc. (UPST) presents a compelling case for new investments, highlighting the ongoing potential of AI in improving credit outcomes, although concrete evidence of these benefits is still awaited [1] Company Analysis - The company is positioned within the AI sector, focusing on credit assessment and lending solutions, which are expected to evolve as AI technology matures [1] - Incremental benefits in credit outcomes from AI applications are still pending verification, indicating a need for further observation and analysis [1] Investment Perspective - The current market sentiment suggests that while the promise of AI is not yet fulfilled, there remains optimism regarding its future impact on credit markets [1] - Investors are encouraged to monitor developments closely as the situation evolves, particularly in relation to the effectiveness of AI in credit decision-making [1]

Core Viewpoint - The article emphasizes the importance of conducting personal in-depth research and due diligence before making investment decisions, highlighting the inherent risks involved in trading [3]. Group 1 - The analysis is intended solely for informational purposes and should not be interpreted as professional investment advice [3]. - There is a clear disclaimer regarding the lack of any stock, option, or derivative positions in the companies mentioned, indicating a neutral stance [2]. - The article expresses the author's personal opinions and does not reflect any business relationships with the companies discussed [2]. Group 2 - Past performance is noted as not being a guarantee of future results, underscoring the unpredictability of investment outcomes [4]. - The article clarifies that no recommendations or advice are provided regarding the suitability of investments for particular investors [4]. - The authors of the analysis include both professional and individual investors, which may affect the perspectives presented [4].

Core Insights - Upstart Holdings, Inc. is recognized as one of the best AI stocks to buy under $50, providing an AI lending platform that enhances credit risk assessment for banks and credit unions by evaluating over 2,500 data points [1] Financial Performance - In Q3, Upstart reported revenue of $277.1 million, slightly missing the forecast of $279.59 million, while earnings of $0.52 exceeded the forecast of $0.42 [3] - The company projects Q4 2025 revenue to reach $288 million and anticipates full-year 2025 revenue of $1.035 billion [3] Growth and Strategy - The CEO highlighted a 80% year-on-year growth in originations and a 71% growth in revenue, alongside a sixfold sequential increase in GAAP net income, emphasizing the company's focus on rapid growth, profitability, and AI leadership [4] - The platform's learning models continuously adapt based on borrower repayment behavior, indicating a robust AI capability [2]

Core Industry Insights - Investors are increasingly recognizing the potential of AI capabilities in various companies, with notable stock gains in the AI sector, such as Palantir's increase of over 32-fold from its 2022 low [1] - The AI market is projected to grow at a compound annual growth rate (CAGR) of 31% through 2033, indicating that the current AI investment trend is just beginning [1] Company Highlights 1. Advanced Micro Devices (AMD) - AMD has seen a remarkable increase of over 13,000% from its 2015 lows and is positioned to potentially catch up to Nvidia in the AI accelerator market with its upcoming MI450 accelerator [4] - The company forecasts a long-term revenue CAGR of 30%, with a 60% CAGR specifically for its data center segment that designs AI accelerators [5] - AMD's stock has risen over 70% in the past year, with a current forward P/E ratio of 53, making it an attractive option for investors despite a high P/E ratio of 105 [7] 2. CoreWeave - CoreWeave is emerging as a leading AI cloud platform, specifically tailored for AI workloads, and has built a competitive advantage by working with Nvidia's GPUs [8] - The company reported a 204% year-over-year revenue increase to nearly $3.6 billion in the first nine months of 2025, although costs surged by 263% during the same period [9] - Despite a net loss of $771 million in the first three quarters of 2025, down from $857 million the previous year, the stock is currently trading at a significant discount, with a price-to-sales (P/S) ratio just above 7 [10][12] 3. Upstart Holdings - Upstart is leveraging AI for loan evaluations, presenting a disruptive opportunity in a market dominated by Fair Isaac's FICO score since 1989, with a potential market opportunity of $1 trillion [13] - The company's AI model utilizes over 2,500 variables and can make 91% of assessments without human intervention, potentially approving 101% more applicants than traditional methods in 2024 [14] - Upstart's revenue for the first nine months of 2025 was $685 million, a 57% increase from the previous year, and it returned to profitability with earnings of $35 million during the same period [15][17]

Core Insights - The fintech sector is undergoing significant transformation driven by innovations in digital payments, credit underwriting, and user experience, with Block, Inc. and Upstart Holdings emerging as key players due to their disruptive business models and strategic growth initiatives [2][3]. Block's Case - Block is developing a comprehensive fintech platform through its Square, Cash App, and Afterpay ecosystems, providing end-to-end solutions across various financial services [4]. - In Q3 2025, Block's net revenues increased by 2.3% year-over-year, with gross profit rising by 18.3%, driven by Cash App's growth of 24.3% and Square's increase of 9.2% [4][9]. - New product introductions, such as Cash App Pools and enhancements to Square's AI assistant, are aimed at deepening user engagement and expanding service offerings [5]. - Block is aggressively investing in partnerships to enhance its market position, including collaborations with Thrive and Blackbird Bakery to improve service delivery [6]. - Despite its growth, Block faces challenges from shifts in consumer spending and increasing competition from peers like PayPal and Shopify [7]. Upstart's Case - Upstart operates as an AI-driven lending marketplace, connecting consumers with over 100 banks and credit unions, and reported a 71% revenue increase year-over-year in Q3 2025, with loan originations climbing by 80% [8][9]. - The company has diversified its offerings beyond personal loans into auto lending, HELOCs, and small-dollar loans, which accounted for nearly 12% of total originations in Q3 2025 [10]. - Upstart's AI automation powered 91% of loans in Q3 2025, enhancing scalability and reducing approval times [12]. - The company continues to expand its lending partnerships, aiming to increase its market reach [11]. - However, Upstart's reliance on AI-driven models poses risks, particularly in economic downturns, though management has initiated upgrades to mitigate volatility [13]. Comparative Estimates - The Zacks Consensus Estimate for Block's 2025 sales implies a modest growth of 0.8%, with EPS expected to decline by 28.2% [14]. - In contrast, Upstart's 2025 sales are projected to grow by 62.8%, with positive trends in EPS estimates over the past 60 days [16][17]. Valuation and Performance - Over the past month, Block and Upstart shares have increased by 1.8% and 1.6%, respectively, outperforming the S&P 500 [19]. - Block is trading at a forward Price/Sales (P/S) ratio of 1.48X, while Upstart's P/S ratio stands at 3.64X, both below their one-year medians [19]. Conclusion - Block has a strong payments ecosystem but faces short-term challenges from consumer spending and competition, while Upstart shows clearer operating leverage and growth potential through AI-driven innovations [21].

Core Insights - Upstart is leveraging artificial intelligence to innovate the lending process, aiming to enhance credit access for borrowers and increase revenue for its banking partners, despite a significant decline in share price [1][4] - The comparison between Upstart and American Express highlights different investment opportunities within the financial services sector, with American Express being a more established player [2] Upstart Analysis - Upstart utilizes AI to analyze 2,500 variables for assessing borrower repayment ability, significantly more than traditional FICO scores, and has originated $50 billion in loans across various markets [5] - The company's financial performance is highly cyclical, with a 39% revenue decline in 2023 due to rising interest rates, resulting in a net loss of $240 million; however, there was a 71% revenue growth in Q3, and positive GAAP earnings for two consecutive quarters [6] American Express Analysis - American Express reported a revenue increase of 11% year-over-year to $18.4 billion in Q3 2025, driven by a 9% growth in payment volume and the addition of 5.7 million new active cards [7] - The company benefits from a strong brand presence and a powerful network effect, positioning it favorably in the credit card market [8]

Core Insights - Maple Tree Capital's Q3 2025 performance was mixed, with a notable decline in its Jonagold portfolio, which ended the quarter with a 13.12% loss, primarily due to the late-quarter decline of Upstart Holdings, Inc. [1] - Conversely, the Heartwood portfolio performed exceptionally well, gaining 40.2% in the same quarter and exceeding 100% return since its inception in 2023, significantly outperforming the S&P 500's 82% return during that period [1] - Upstart Holdings, Inc. (NASDAQ:UPST) is highlighted as a key stock, with a one-month return of 9.06% but a 52-week loss of 24.36%, closing at $46.57 per share with a market capitalization of $4.531 billion [2] - The sentiment around Upstart Holdings was notably high leading into its Q2 results, with significant media interest and coverage, including an interview featuring a prominent analyst on a popular YouTube channel [3]

Core Viewpoint - Wall Street analysts believe Upstart Holdings and Atlassian are undervalued, predicting significant gains for shareholders in the coming years, despite their recent stock declines [1]. Group 1: Upstart Holdings - Upstart is an AI lending platform that enhances credit risk assessment by analyzing over 2,500 variables, unlike traditional systems that rely on FICO Scores [4]. - The highest target price for Upstart is set at $80 per share, indicating a potential upside of 70% from its current price of $47 [5]. - Upstart's third-quarter financial results showed a 71% increase in total revenue to $277 million, with non-GAAP net income rising to $0.52 per diluted share from a loss of $0.06 per share last year [7]. - Wall Street anticipates Upstart's adjusted earnings to grow at an annual rate of 51% through 2026, making its current valuation of 33 times earnings appear reasonable [8]. Group 2: Atlassian - Atlassian is known for its work management software, particularly Jira, which is widely used across both technical and non-technical departments [9]. - The highest target price for Atlassian is set at $320 per share, suggesting a potential upside of 100% from its current price of $160 [5]. - Atlassian's first-quarter fiscal 2025 results reported a 21% revenue increase to $1.4 billion, with non-GAAP earnings rising 35% to $1.04 per diluted share [13]. - Wall Street expects Atlassian's adjusted earnings to grow at 22% annually through June 2027, with a current valuation of 41 times earnings considered reasonable [14].