Upstart Lends Money It Doesn't Hold. What Does That Do to the Stock in a Downturn?

Key Points Upstart is a lender that uses AI to price loans. It does not hold loans on its balance sheet; it syndicates them for third parties. The company has struggled in past downturns, but it may have set itself up better for the future. 10 stocks we like better than Upstart › Lending is a tricky business. Interest income from payments may look stellar for years, but if just a small portion of these loan recipients stops paying, profits can be wiped away. A peculiar business in the lending "supply chain" is Upstart Holdings (NASDAQ: UPST) . The pandemic-era stock market darling uses artificial intelligence ( AI ) to price personal and auto loans before selling them to third parties.