There’s a weird kind of timing happening in AI lending right now: everyone talks about the breakthrough moment, but the money is often made in the long build-up.
OpenAI launched its ChatGPT artificial intelligence (AI) application in November 2022, and it attracted over 100 million users in just two months. This marked the beginning of the AI boom, but some companies had been developing and even monetizing this revolutionary technology for several years prior. Upstart is one of them.
Upstart Holdings (UPST +2.94%) has been using AI to assess the creditworthiness of potential borrowers since 2014. Today, the company’s algorithms might be even more predictive than traditional loan assessment tools, including Fair Isaac’s FICO credit scoring system. Misryoum newsroom reported that Upstart’s own numbers show how fast things can change—especially when the market starts asking different questions about risk.
So here’s the part that’s gotten a lot of attention: the stock is down hard this year. Upstart’s stock has opened this year with a 40% decline, and it’s now trading at the cheapest level in almost three years. And when you see a tech-ish story with a massive revenue pop, but the shares getting beaten up, investors tend to start doing math like, “Okay… what if the market’s overreacting?” Misryoum editorial desk noted that’s essentially the setup behind a simple prediction: the stock could double before 2026 is over.
Misryoum newsroom reported that AI is already reshaping lending workflows. The FICO credit scoring system takes into account just five core metrics to determine a borrower’s creditworthiness, including their existing debts and repayment history. Upstart’s algorithm measures over 2,500 data points to build a more complete profile of the borrower, which the company says can lead to a higher chance of approval with a more accurate interest rate. It would take human loan assessors days or even weeks to analyze an equivalent amount of data, leading to an unsatisfactory customer experience. In the fourth quarter of 2025, Upstart’s algorithm handled 91% of all loan applications autonomously with no human intervention. And that autonomy matters—at least to anyone who’s ever waited on a form to process, refreshed a page, then stared at the little spinning icon longer than they wanted.
The company also says the demand side is showing up. Upstart originated almost 1.5 million loans during 2025, a whopping 115% increase compared to 2024. Those loans had a total dollar value of $11 billion, which was up 86%. Unsecured personal loans make up the majority of Upstart’s originations, but the company is making a lot of headway in the automotive and home equity line of credit (HELOC) segments. In fact, originations grew fivefold in those two categories last year. But it’s not being pitched as a niche tweak. Upstart chairman Dave Girouard believes AI will replace all human-led loan assessment methods within the next decade, leaving $25 trillion in global originations and $1 trillion in fee revenue up for grabs for companies just like this one.
Then there’s the earnings story—also where things get sharper. Upstart earns fees for originating loans on behalf of banks and other financial institutions. It typically doesn’t lend any money itself, except for research and development purposes, but that might be about to change. Last month, the company announced it would apply for a national bank charter so it could accept deposits from consumers and use them to write loans. Misryoum analysis indicates this is a big strategic move: Upstart is preparing to launch America’s first AI-powered bank.
In 2025, Upstart generated a record $1.04 billion in revenue, which was a whopping 64% increase compared to 2024. It also generated $53.6 million in generally accepted accounting principles (GAAP) net income, which was a big swing from the $128.5 million net loss it delivered in the prior year. After excluding one-off and noncash expenses like stock-based compensation, Upstart generated $230.4 million in adjusted earnings before interest, tax, depreciation, and amortization (EBITDA), which was a more than twentyfold increase compared to 2024. Misryoum editorial team stated that estimates compiled by Yahoo! Finance show expectations for further growth during 2026—though if the bank plan truly lands, future results could eclipse anything it delivers this year.
Now to the part traders really care about: why a double. Upstart has a market capitalization of $2.5 billion as I write this, so based on the company’s 2025 revenue, its stock is trading at a price-to-sales (P/S) ratio of just 2.7. That’s a hefty discount to its three-year average of 5.7, and it’s approaching the lowest point of the range over that period. Based on Wall Street’s 2026 revenue estimate of $1.4 billion, Upstart stock is trading at an even more attractive forward P/S ratio of 1.8. Misryoum newsroom noted that suggests Upstart stock would have to climb by 50% before the end of 2026 just to maintain its current P/S ratio of 2.7. However, it would have to soar by 216% to bring its P/S ratio in line with its three-year average.
It might be a tall order to expect the stock to triple by the end of this year, but even if it delivers half that gain, it would still double from its current level. Misryoum editorial desk noted that could be plausible, not just because of the growth in revenue and earnings, but because investors are likely to receive more bullish news in the coming quarters about the company’s plan to become a full-fledged AI bank. And honestly, if you’ve sat in a quiet room listening to your phone buzz—then checked the market again—you know why people keep staring at charts when the story sounds like it’s finally catching up.
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