Shares of Upstart Holdings, Inc. (UPST) are plummeting 14.81% in pre-market trading on Wednesday, following the release of its first-quarter earnings report and future outlook after Tuesday's market close. The AI-driven lending platform's mixed financial results and disappointing guidance for the second quarter have spooked investors, triggering a significant sell-off.

Upstart reported better-than-expected Q1 results, with adjusted earnings of $0.30 per share, surpassing analysts' expectations of $0.17 per share. Revenue for the quarter came in at $213.4 million, up 67% year-over-year and above the consensus estimate of $201.3 million. However, the company still posted a GAAP loss of $0.03 per share.

Despite the Q1 earnings beat, investors are focusing on Upstart's weaker-than-anticipated guidance for the second quarter. The company forecasts Q2 revenue of approximately $225 million, slightly below analysts' expectations of $226.2 million. More concerning to investors is the projected Q2 net loss of around $10 million, which is worse than what analysts were anticipating. This outlook suggests that Upstart may face challenges in maintaining profitability in the near term, likely due to the current high-interest rate environment affecting demand for loans. While Upstart raised its full-year revenue guidance to about $1.01 billion and expects to achieve positive GAAP net income in the second half of the year, this long-term optimism has not been enough to offset the near-term concerns, resulting in the sharp decline in Upstart's stock price.