Shares of Upstart Holdings, Inc. (UPST) rallied 5.13% in Tuesday's intraday trading session, propelled by the company's strong fourth-quarter earnings report and the increasing adoption of its AI-powered lending models.

Upstart, a leading fintech company that utilizes artificial intelligence (AI) to determine borrowers' creditworthiness, reported a significant 68% year-over-year increase in loan transaction volume to $2.1 billion in the fourth quarter. This surge in loan origination volume, coupled with the company's expanding product offerings, drove a 56% jump in revenue to $219 million, surpassing analysts' expectations.

The company's success can be attributed to its proprietary AI models, which have proven to be more effective than traditional credit scoring systems in approving borrowers while maintaining lower default rates. Upstart's latest model, Model 18, increased loan origination dollars by more than 15% without compromising credit quality, highlighting the company's technological advantage.