Upstart's AI Lending Model Faces Its Toughest Test if Rates Stay High

Published June 22, 2026 · Category: Finance

Overview

Upstart (NASDAQ: UPST), an AI-powered online lending marketplace, went public at $20 in Dec. 2020. It soared to a record high of $390 in Oct. 2021, but it now trades at about $31. Let's see why Upstart's stock pulled back -- and why it could struggle if interest rates stay high.

Image source: Getty Images.

Upstart isn't a traditional lender. It's an AI-powered middleman that approves loans for banks, credit unions, and auto dealerships. Rather than analyzing traditional data like an applicant's credit score, credit history, or annual income, Upstart reviews non-traditional data points -- including previous jobs, standardized test scores, and GPAs -- to approve a wider range of loans for younger and lower-income applicants with limited credit histories. It generates most of its revenue by taking a referral fee on each approved loan.

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Originally published at www.fool.com.

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