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Additional Reading from MarketBeat
Insider Buying Says Upstart Isn’t Down for the CountAuthored by Thomas Hughes. Originally Published: 5/18/2026. 
Key Points
- Upstart insiders own a considerable exposure and are buying shares in May.
- Numerous catalysts exist to accelerate growth and profitability.
- Near-term headwinds exist, but analysts and institutions are buying into the long-term forecast.
- Special Report: The Biggest IPO Ever: Claim Your Stake Today
Insiders are buying Upstart (NASDAQ: UPST), highlighting two interesting developments. The first is the kind of CEO transition investors usually can only dream about: a shift from one founder to another, preserving continuity of vision, and from one generation to the next, supporting long-term tenure. The second is that these insiders, including the outgoing and newly seated CEO, bought shares in May, even though they didn’t have to. They already had substantial exposure to this fintech stock.
The Wall Street Journal is already raising the alarm about a potential market crash, and Weiss Ratings research points to the first half of 2026 as a particularly rough stretch for certain holdings.
Some of America's most popular stocks could take serious damage as a radical market shift plays out. Analysts at Weiss Ratings have identified five names you may want to remove from your portfolio before this unfolds.
If any of these are in your portfolio, now is the time to review your positions. See the 5 stocks to avoid
Upstart is an AI-powered lending platform. It is not a financial institution per se, but rather a loan originator that uses a cloud-based, AI-enabled platform to qualify consumers and connect them with loans. The platform offers several advantages to the industry and consumers, including higher approval rates, lower risk, more efficient operations, 90% of loans fully automated, and lower-cost loans for consumers. Analysts and Institutions Buy Into Upstart’s Long-Term OutlookAnalysts and institutional trends underscore the opportunity highlighted by the insiders. InsiderTrades tracks 16 analysts who rate the stock a consensus Hold. However, that lukewarm rating is offset by a 44% buy-side bias and roughly 55% upside to the consensus target. The bad news is that consensus has fallen on a trailing 12-month basis, reflecting the stock’s muted price action. However, recent revisions suggest the trend may be turning. Price target changes released since the May 5, 2026, earnings report include some reductions and new initiations, but both point to levels that still imply about 55% upside. Institutional trends reveal a solid support base that has accumulated shares since the IPO. The key details include a 63% ownership rate, activity that ramped in 2025 and again in early 2026, and the balance of buying versus selling. Institutions are accumulating at a pace greater than $2-to-$1, providing a strong market tailwind. The price action would look even more bullish if not for the robust short interest. Short sellers have leaned into this market because of its exposure to interest rates, arguing that its untested algorithm sets it up for failure. The flip side is that elevated short interest, at 33%, also sets the stock up for short squeezes if positive catalysts emerge, many of which are on the horizon. The primary catalyst this year was securing more than $4 billion in committed capital. The deal, which includes Fortress and Centerbridge, derisks the outlook by reducing exposure to spot market rates and their impact on margins. Expansion into new verticals is also expected to drive growth, as is the move toward bank status. Upstart: A Rising Start in FintechUpstart announced earlier this year that it had applied for a National Bank Charter. Still under review, the charter would enable Upstart to hold deposits, provide easier access to capital, and allow for a more stable lending-rate schedule. The impact on the business would be substantial, reducing risk, accelerating growth, and stabilizing the profitability outlook, effectively bypassing 50 individual state regulators in favor of federal oversight. 
The price action suggests a potential bottom, but there is no clear sign of a reversal yet. Support appears to be near $26.35 and is unlikely to break. The bad news is that this market may continue to drift at current levels until a more meaningful catalyst emerges. As it stands, the company is growing and outperforming consensus estimates, but profitability remains erratic and fell short in the latest report. Upstart: Hurdles Versus Catalysts in 2026Upstart’s biggest hurdle may be itself. The company’s AI models are effective, but class-action lawsuits allege they are also responsible for the company’s business weakness. Lawsuits filed in early 2026 claim the Model 22 upgrade was overly sensitive to macroeconomic signals, leading to significant declines in approvals, revenue, and earnings. For investors, the risk is twofold: the risk of change and the risk of no change to the models. Other risks include competition. While Upstart continues to gain traction, competitors including Sofi Technologies (NASDAQ: SOFI) and Affirm (NASDAQ: AFRM) continue to dominate the field. Their strengths lie in consumer loans, which limits Upstart’s addressable market, while Affirm’s point-of-sale model captures customers before they even need a loan. Upstart’s advantages include higher approval rates and turnkey integrations. What is the market getting wrong about Upstart? The main mistake is viewing it as merely a cyclical fintech with interest rate risk, rather than a scalable AI platform. While near-term hurdles remain, the long-term outlook includes rapid expansion into new verticals, including HELOCs and automotive lending. In addition, the 2026 margin compression is due in large part to timing issues, not fundamental defects, and to front-loaded reinvestment into growth verticals. The likely outcome is that the company continues to grow robustly in the coming years, fine-tuning its algorithm as it expands growth and profitability. |
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