Upstart Experiences Stock Surge After Analyst Rating

The stock of the AI-based credit platform Upstart saw a significant increase of 17.5% in morning trading. This surge is due to a re-evaluation by an analyst from Wedbush, who upgraded the stock from "Underweight" (Sell) to "Neutral" and raised the price target from $10 to $45. The analyst considers the current price level to have a balanced risk-reward ratio. Positive factors such as improved credit metrics, lower interest rates, and a favorable Upstart Macro Index could lead to positive developments in lending and adjusted EBITDA in the second half of 2024. However, the volatility of Upstart stock is notable: in the past twelve months, there have been over 70 price movements of more than 5%. Such strong fluctuations are rare even for Upstart and suggest that this news had a significant impact on the market. Just 28 days ago, we reported a price drop of 9.8%, triggered by the company's announcement to issue $300 million in convertible senior notes to institutional investors. Concerns about the dilution effect of these notes, which can be converted into common stock, were key drivers here. Since the beginning of this year, Upstart has gained 41.4% and recently reached a new 52-week high of $54.96 per share. Investors who purchased shares at the initial public offering in December 2020 for $1,000 could now enjoy an investment valued at $1,862. For attentive market participants, it has become apparent that generative AI will have an enormous impact on the corporate practices of large companies. While Nvidia and AMD are trading near their all-time highs, we favor a lesser-known yet profitable semiconductor stock that benefits from the rise of AI. You can access our free report on the growth story of this semiconductor company here.