Upstart Holdings, Inc. (UPST) saw its stock price plummet by 5.03% during Friday's trading session, as investors grappled with ongoing economic uncertainties and bearish analyst sentiment. The AI-powered lending platform, which has been gaining attention in the fintech space, faced significant selling pressure despite its recent positive quarterly results.

Upstart utilizes artificial intelligence to assist banks and credit unions in making more informed lending decisions. The company's platform analyzes over 2,500 variables to assess credit risk, potentially approving more borrowers at lower interest rates compared to traditional models. However, this business model makes Upstart particularly sensitive to economic fluctuations, which may be contributing to investor concerns.

The steep decline in Upstart's stock price comes as Wall Street analysts express skepticism about the company's near-term prospects. Notably, Michael Ng from Goldman Sachs has set a target price of $15 per share for Upstart, implying a significant downside from its current trading levels. This bearish outlook, coupled with broader economic worries stemming from President Trump's trade policies, appears to be weighing heavily on investor sentiment.

While Upstart reported strong first-quarter results, with revenue increasing 67% to $2.1 billion and positive non-GAAP earnings, the company's future performance remains closely tied to the overall economic environment. As concerns mount over a potential economic slowdown, investors may be reassessing the risks associated with Upstart's business model, leading to Friday's sharp stock decline. Despite these challenges, some analysts remain optimistic about Upstart's long-term growth potential, expecting adjusted earnings to grow at 101% annually through 2026.