What Happened?
Shares of aI-powered lending platform Upstart (NASDAQ: UPST) fell 11.1% in the afternoon session after the company reported first quarter 2025 results which were overshadowed by concerns after announcing Fortress would purchase up to $1.2 billion of loans, raising questions about liquidity and lending capacity. This raised questions about balance sheet health (Upstart needs liquidity) and future lending capacity. The quarter itself was decent with sales, EBITDA and EPS topping estimates while full year guidance was slightly lifted.
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What The Market Is Telling Us
Upstart’s shares are extremely volatile and have had 77 moves greater than 5% over the last year. But moves this big are rare even for Upstart and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 13 days ago when the stock gained 6.3% on the news that stocks extended their rebound, led by strong gains in the technology sector, as renewed optimism surrounding U.S.–China trade negotiations lifted investor sentiment.
Contributing to the bullish tone was a standout earnings report from enterprise software leader ServiceNow, which topped Wall Street's expectations on RPO, profit and earnings. More importantly, the company's remaining performance obligations (RPO), a key forward-looking metric for future revenue, gave investors confidence that enterprise customers were not pulling back spending amidst uncertain macro.
This optimism was further reinforced by solid results from Texas Instruments and Lam Research. Their performance was especially encouraging for semiconductor stocks, which had been under pressure due to their exposure to global trade tensions. These earnings results suggested that, despite macroeconomic uncertainties, demand in key tech verticals remained resilient.
Upstart is down 24.3% since the beginning of the year, and at $46.03 per share, it is trading 48.2% below its 52-week high of $88.77 from February 2025. Investors who bought $1,000 worth of Upstart’s shares at the IPO in December 2020 would now be looking at an investment worth $1,563.
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