Upstart (UPST) Stock Trades Up, Here Is Why

What Happened?

Shares of AI lending platform Upstart (NASDAQ:UPST) jumped 3.7% in the afternoon session after Compass Point upgraded the stock to Neutral from Sell and raised its price target. 

The firm increased its price target to $30 from $20. The change in rating came after Upstart's fourth-quarter 2025 earnings report. In that report, the company provided a revenue growth outlook of about 35% per year through 2028.

After the initial pop the shares cooled down to $32.01, up 4.8% from previous close.

What Is The Market Telling Us

Upstart’s shares are extremely volatile and have had 69 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 5 days ago when the stock dropped 8.5% as investors continued to distinguish between the winners and losers in the artificial intelligence boom, leading to a broad sell-off. 

The Nasdaq fell 1.5%, while the S&P 500 and Dow Jones Industrial Average also saw significant declines. This market shift indicated that investors were becoming more selective, moving beyond the initial excitement surrounding AI. In addition, a stronger-than-expected U.S. jobs report dampened investor expectations for near-term interest rate cuts from the Federal Reserve. 

Data showed the U.S. labor market remained resilient, with non-farm payrolls indicating impressive job creation and falling unemployment. This positive economic signal led markets to re-evaluate the timeline for monetary policy easing, which is the process by which a central bank reduces interest rates to stimulate economic growth. Investors priced in the first potential rate cut for July, a shift from previous expectations of June. This delay created a headwind for growth-oriented sectors like software, as higher interest rates can reduce the present value of future earnings.

Upstart is down 30.2% since the beginning of the year, and at $32.01 per share, it is trading 63.2% below its 52-week high of $86.89 from February 2025. Investors who bought $1,000 worth of Upstart’s shares 5 years ago would now be looking at an investment worth $366.93.

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