Upstart Stock Forecast: After large rally, UPST loses ground on lower US Retail Sales

Upstart (UPST), the AI-inflected lending platform, lost more than 1% in Tuesday’s premarket after US Retail Sales for June came below Wall Street’s forecast. The stock is trending lower a few minutes into the regular session as well. Upwork stock has been experiencing its largest rally of the year. Last week saw UPST stock advance 26.8%, and Monday tacked on another 13.7% performance.

NASDAQ 100 futures dropped 0.2% early Tuesday on the US Retail Sales miss, but UPST stock rebounded at the open only to sell off once again.

Upstart stock news: AI names remain in focus

June US Retail Sales came in below the analyst consensus early Tuesday. The economic indicator grew 0.2% MoM in June compared with consensus of 0.5%. 

US Retail Sales ex-Autos also were reported at 0.2% MoM – below the 0.3% consensus.

Upstart will likely be able to ignore this type of news, though the release did push the major indices lower early on Tuesday.

Artificial intelligence remains a primary focus of equity investors this summer, and Upstart’s lending platform was using the term to describe its lending platform before ChatGPT revved up interest in the technology last winter. Basically, Upstart’s AI engine scours the internet for information about an applicant’s credit quality that it says allows it to render a more nuanced and accurate picture of credit worthiness.

When inflation ticked up in 2022, many of Upstart’s lending partners fled the platform. But now that inflation appears to be subsiding, many of those same partners are returning. 

Arbor Financial Credit Union announced on July 12 that it is partnering with Upstart to supply credit for personal loans.

“As part of the Upstart Referral Network, Arbor is able to attract new members and offer them its personal loans through an all-digital lending experience,” said Michael Lock, Upstart’s Senior Vice President of Lending Partnerships.

Upstart stock forecast

Upstart stock is now reaching the top end of a resistance level at $55. That resistance area ranges from about $52 and comes from a bullish reversal attempt in May and June of 2022. The stock has come a long way this year and is already up 310% year to date.

Above $55, UPST faces a former support range that lasts from $71 to $75, which could turn into resistance. The major obstacle at this time is the heavily overbought Relative Strength Index (RSI), which reached 79 on Monday. A reading of 70 is normally when a stock is first assessed as overbought.

Support can be found at the 9-day and 21-day Simple Moving Averages (SMAs) at $43 and $38. Longer-term support arrives near $30.

UPST daily chart