Jim Cramer Flags High Risk in Upstart Holdings Amid Rising Loan Balance

Published 9 hours agoUPST

Jim Cramer Flags High Risk in Upstart Holdings Amid Rising Loan Balance

Jim Cramer, host of CNBC's 'Mad Money,' has raised alarms over Upstart Holdings, Inc. (NASDAQ: UPST), labeling the AI-driven lending platform as 'a little too risky' due to its current financial situation. Cramer pointed out in October 2023 that the company, which is reportedly losing money, is not an ideal investment option for him according to Benzinga.

One of the main concerns revolves around Upstart's business model, which includes using AI technology to originate loans and sell these to banks without taking on credit risk itself. However, by the first quarter of 2023, Upstart held $604.4 million worth of loans on its balance sheet, a significant increase from $252 million at the end of 2021. This growth has sparked debates on the potential risks tied to its strategic direction, as noted by Nasdaq.com.

Defending the company's strategy, CEO Dave Girouard stated that holding loans was a planned move to test new products, asserting it represents just a small fraction of their total business operations. Despite this, Cramer continues to express skepticism over the choice to retain loans, questioning the associated risks. Meanwhile, Upstart's stock price stands at $48.68 as of April 26, 2025, indicating ongoing investor interest and market sentiment.

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