Lawsuit filed for Investors who lost money with shares of Upstart Holdings, Inc. (NASDAQ: UPST)

An investor, who purchased shares of Upstart Holdings, Inc. (NASDAQ: UPST), filed a lawsuit over alleged violations of Federal Securities Laws by Upstart Holdings, Inc. in connection with certain allegedly false and misleading statements.

Investors who purchased shares of Upstart Holdings, Inc. (NASDAQ: UPST) have certain options and for certain investors are short and strict deadlines running. Deadline: June 8, 2026. NASDAQ: UPST investors should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 - 1554.

San Mateo, CA based Upstart Holdings, Inc. together with its subsidiaries, operates a cloud-based artificial intelligence (AI) lending platform in the United States. Its platform includes unsecured personal loans, small dollar loans, auto refinance, auto retail loans, auto secured personal loans, and home equity lines of credit.
Upstart Holdings, Inc. t purportedly uses its proprietary AI models to, inter alia, more accurately quantify the true risk of a loan, a process that it refers to as "risk separation." The Company claims that this differentiated approach to underwriting has generally led to higher approvals and lower interest rates relative to traditional lending practices, providing more predictable returns to its capital partners, including banks, credit unions, and institutional investors. Defendants periodically calibrate Upstart's AI models to improve accuracy and automation of loan approvals.
In early May 2025, Upstart Holdings, Inc. launched the latest iteration of its AI model, referred to as "Model 22". At all relevant times, Defendants touted the purported accuracy of Model 22, claiming that it was increasing loan approval rates and, accordingly, the Company's revenues and growth. For example, in February 2025, Upstart issued financial guidance for the full year ("FY") of 2025, including, inter alia, revenue of approximately $1 billion, which included revenue from fees of approximately $920 million.

In May 2025, Upstart Holdings, Inc. slightly raised the foregoing guidance to revenue of approximately $1.01 billion, which still included revenue from fees of approximately $920 million. Then, in August 2025, Upstart Holdings, Inc. substantially raised the foregoing guidance to revenue of approximately $1.055 billion, which included revenue from fees of approximately $990 million - $70 million more than previously projected - citing improvements in performance driven by Model 22.

On November 4, 2025, Upstart Holdings, Inc. reported its financial results for the third quarter ("Q3") of 2025. Upstart reported, inter alia, Q3 2025 revenue of $277 million, missing its previously issued Q3 2025 revenue guidance of approximately $280 million, as well as consensus estimates by $2.62 million. Upstart also reported that it expected to generate revenue of only $288 million in the fourth quarter ("Q4") of 2025, significantly below consensus estimates of $303.7 million. Further, Upstart negatively revised its FY 2025 revenue guidance to approximately $1.035 billion, versus the $1.06 billion consensus estimate and its prior guidance of approximately $1.055 billion, as well as its expected FY 2025 revenue from fees, which it reduced to approximately $946 million from its prior outlook of approximately $990 million.

The same day, during a related earnings call, Upstart Holdings, Inc. blamed Upstart's disappointing results on Model 22, which they revealed had "overreact[ed]" to macroeconomic signals in the quarter, reducing borrower approvals and conversion rates. Defendants also acknowledged that they had "knowingly" calibrated their AI model to be "more conservative on the credit side in earlier parts of the quarter", and that the negative impacts of Model 22's "overresponsive[ness]" to macroeconomic signals in the quarter would continue to negatively impact revenues in Q4 2025, resulting in Upstart's negatively revised FY 2025 financial guidance.

Upstart Holdings, Inc. reported that its annual Total Revenue rose from $628.83 million in 2024 to over $1.02 billion in 2025, and that its Net Loss of $128.58 million in 2024 turned into a Net Income of $53.6 million in 2025.

Shares of Upstart Holdings, Inc. (NASDAQ: UPST) declined from $87.30 per share on July 31, 2205, to as low as $23.97 per share on March 30, 2026.

The plaintiff claims that between May 14, 2025 and November 4, 2025, the Defendants made false and/or misleading statements and/or failed to disclose that Model 22 frequently overreacted to negative macroeconomic signals in performing its risk-separation processes, that accordingly, Model 22's overall accuracy and propensity to increase loan approval rates was overstated, that Model 22's overly conservative assessment of credit and macroeconomic conditions was having a significant negative impact on Upstart's revenue results, rendering the Company's previously issued FY 2025 revenue guidance unreliable and/or unrealistic, and that as a result, Defendants' public statements were materially false and misleading at all relevant times.

Those who purchased shares of Upstart Holdings, Inc. (NASDAQ: UPST) have certain options and should contact the Shareholders Foundation.

Contact:
Michael Daniels
Shareholders Foundation, Inc.
3111 Camino Del Rio North
Suite 423
San Diego, CA 92108
Tel: +1-(858)-779-1554
E-Mail: mail@shareholdersfoundation.com

About Shareholders Foundation, Inc.
The Shareholders Foundation, Inc. is a professional portfolio monitoring and settlement claim filing service, and an investor advocacy group, which does research related to shareholder issues and informs investors of securities lawsuits, settlements, judgments, and other legal related news to the stock/financial market. Shareholders Foundation, Inc. is in contact with a large number of shareholders and offers help, support, and assistance for every shareholder. The Shareholders Foundation, Inc. is not a law firm. Referenced cases, investigations, and/or settlements are not filed/initiated/reached and/or are not related to Shareholders Foundation. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.

This release was published on openPR.