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Can Open Lending Capitalize on AI the Same Way Upstart Did?

By Brian Stoffel and Brian Feroldi – Oct 22, 2021 at 7:45AM

Key Points

  • This company creates software that it can sell to banks or auto financiers.
  • It focuses specifically on customers on the cusp of having good credit.
  • At the end of the day, the company's proprietary algorithms are paramount.

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While recent results have been impressive, they come with an important caveat.

By now, Upstart Holdings (UPST 10.44%) has definitely captured investor interest. Since going public less than a year ago, the stock has already increased in value by 800%! The basis of the company's appeal: Its machine learning has helped banks make loans to customers who -- in the past -- would have been deemed too risky.

Recent IPO Open Lending (LPRO 1.52%) is looking to do to auto financing what Upstart has done for personal loans. So far, the results have been very positive. But in this Aug. 29 video from Motley Fool contributors Brian Feroldi and Brian Stoffel, you'll find out about a few risks that are key to understanding before making an investment in the stock.

Brian Stoffel has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Upstart Holdings, Inc. The Motley Fool has a disclosure policy.

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