Upstart (UPST) Surges 8.25% on AI Loan Partnership with Tech CU – Is This the Catalyst for a New Bull Run?

Summary
• Upstart (UPST) surges 8.25% to $48.77, driven by a strategic AI loan partnership with Technology Credit Union.
• Intraday range of $46.56 to $49.45 highlights volatile momentum amid sector uncertainty.
• Options chain sees heavy activity on $48 and $49.5 strike contracts, signaling speculative fervor.

Upstart’s stock has ignited a 8.25% rally on December 18, fueled by a high-profile AI-driven loan partnership with Technology Credit Union. The move has outpaced a mixed fintech sector, with traders and analysts scrambling to assess the implications for the company’s AI lending platform and broader market positioning.

AI Loan Partnership Sparks 8.25% Surge in Upstart (UPST)
Upstart’s 8.25% intraday surge stems from a strategic collaboration with Technology Credit Union to deploy AI-powered personal and auto refinancing loans. The partnership, announced earlier in the week, aims to streamline borrowing processes and expand loan accessibility using machine learning algorithms. This move has reinvigorated investor confidence in Upstart’s AI-driven lending model, which had faced scrutiny amid rising interest rates and regulatory scrutiny. The 2.6% initial post-announcement rally on Wednesday has now accelerated into a broader breakout, with traders interpreting the partnership as a catalyst for renewed growth in a sector struggling to adapt to macroeconomic headwinds.

Financial Tech Sector Mixed as Upstart Outperforms
The Financial Technology sector, led by PayPal (PYPL) down 1.33%, has shown mixed performance. While Upstart’s 8.25% surge stands out, peers like Affirm and SoFi have lagged due to broader fintech sector jitters. The sector’s 0.5% decline contrasts sharply with Upstart’s momentum, suggesting the AI loan partnership has created a unique narrative. Analysts note that Upstart’s focus on AI-driven underwriting, rather than traditional credit scoring, positions it differently from competitors reliant on macroeconomic tailwinds.

Options and ETF Strategies for Upstart’s Volatile Move – Leveraged ETFs and Key Contracts
• MACD: 0.876 (bullish divergence), Signal Line: 0.473, Histogram: 0.402 (positive momentum)
• RSI: 57.7 (neutral to overbought), Bollinger Bands: $35.85–$52.41 (wide range)
• 200D MA: $55.15 (below current price), 30D MA: $42.27 (support)

Upstart’s technicals suggest a short-term bullish setup with key resistance at $49.45 (intraday high) and support at $46.87 (30D support). The 16.55% surge in the Tradr 2X Long UPST Daily ETF (UPSX) underscores leveraged demand. For options, two contracts stand out:

UPST20251226C48 (Call, $48 strike, 12/26 expiry):
• IV: 68.98% (high volatility)
• Leverage Ratio: 18.61% (moderate)
• Delta: 0.597 (moderate sensitivity)
• Theta: -0.237 (rapid time decay)
• Gamma: 0.073 (strong price sensitivity)
• Turnover: 37,161 (high liquidity)
• Payoff at 5% upside ($51.16): $3.16/share. This call offers a balance of leverage and liquidity, ideal for a continuation of the AI-driven rally.

UPST20251226P48 (Put, $48 strike, 12/26 expiry):
• IV: 65.93% (high volatility)
• Leverage Ratio: 31.79% (aggressive)
• Delta: -0.401 (moderate bearish bias)
• Theta: -0.011 (slow decay)
• Gamma: 0.076 (strong price sensitivity)
• Turnover: 50,845 (high liquidity)
• Payoff at 5% upside ($51.16): $0 (out of the money). This put offers downside protection if the AI narrative falters, with high liquidity for quick entry/exit.

Action: Aggressive bulls may consider UPST20251226C48 into a breakout above $49.21 (Bollinger Upper Band). Cautious traders should monitor $46.87 support and consider UPST20251226P48 for hedging.

Backtest Upstart Stock Performance
The backtest of UPST's performance after a 8% intraday surge from 2022 to now shows mixed results. The 3-day win rate is 50.11%, the 10-day win rate is 50.96%, and the 30-day win rate is 49.68%. The maximum return during the backtest period was 8.72%, which occurred on day 54.

Act Now: Upstart’s AI-Driven Momentum Could Fuel Further Gains – Watch for $49.21 Breakout
Upstart’s 8.25% surge is a high-stakes play on AI-driven lending’s potential to disrupt traditional finance. While the stock’s short-term trajectory hinges on sustaining momentum above $49.21 (Bollinger Upper Band), the partnership with Tech CU provides a compelling narrative. The sector’s mixed performance, with PayPal (PYPL) down 1.33%, highlights Upstart’s unique positioning. Traders should prioritize UPSX for leveraged exposure and UPST20251226C48 for a bullish breakout. If $46.87 support holds, the AI-driven rally could extend into 2026.