While artificial intelligence and its disruptive capabilities have lifted several innovators, the effect has been extremely lumpy for financial technology (fintech) specialist Upstart Holdings Inc (NASDAQ:UPST). Though the business offers tremendous upside potential, an uncertain macro environment has imposed chaos on UPST stock, thus bringing out the skeptics. But with the fundamental backdrop improving, UPST could be a tempting high-risk, high-reward prospect.
A lending platform, Upstart's AI-based underwriting system aims to boost approvals while reducing defaults, thereby attracting attention (especially early on) from both banks and investors. During the frenzy of the COVID-19 crisis — which saw unique catalysts such as rock-bottom interest rates and distributions of stimulus checks — UPST stock skyrocketed toward the $400 level. Unfortunately, a hawkish pivot in monetary policy amid broader economic anxieties practically evaporated sentiment.
