UPST - 1 Artificial Intelligence (AI) Stock Down 94% You Might Want to Buy Before Interest Rates Fall
2024-05-20 05:27:00 ET
Upstart Holdings (NASDAQ: UPST) went public in 2020 priced at $20 per share. In less than 12 months, its stock had soared 2,000% to $401 on the back of the company's lightning-fast revenue growth and its promising potential.
The company developed an artificial intelligence (AI) algorithm to assess the creditworthiness of potential borrowers on behalf of banks, in a bid to move the industry away from Fair Isaac 's decades-old FICO credit scoring system. But when interest rates began to soar in 2022, consumer demand for loans collapsed, and investors also grew concerned that Upstart's algorithm wasn't yet battle-tested in a challenging economic climate.
As a result, Upstart stock has plunged all the way back down to about $25 as of this writing. However, some of the company's core metrics have recently returned to growth, and with the U.S. Federal Reserve poised to cut interest rates later this year, here's why buying the stock now could be a great move.
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1 Artificial Intelligence (AI) Stock Down 94% You Might Want to Buy Before Interest Rates Fall