Investing in the stock market, particularly with a long-term mindset, is a proven way to build lasting wealth. By owning a diversified basket of stocks with the intention of holding them for at least a decade, investors can set themselves up for success. Of course, figuring out what individual stocks to own is the hard part.

Take Upstart (UPST 2.76%): It certainly has the disruptive attributes, especially its focus on artificial intelligence (AI), that can create strong returns. So naturally, investors are probably wondering if it has the potential to be a millionaire-maker stock one day.

Let's take a closer look at this AI lending platform to figure out whether this fintech's shares make for a smart investment over time.

Dealing with some issues

Upstart recently reported its third-quarter results, and the market was not happy with the numbers. As of this writing, the stock is down 15% since the announcement.

The business, which aims to use AI to help lenders make more loans with less risk, missed management's projections across the board. Revenue, net income, contribution margin, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) all came in below internal expectations.

Revenue fell 14% year over year to just under $135 million. The net loss came in at $40 million, which was a slight improvement from the loss of $56 million in the year-ago third quarter.

Nonetheless, these are troubling data points that show the issues facing Upstart in recent quarters. It shouldn't be a surprise that higher interest rates result in reduced demand from borrowers to take out loans.

"We continue to operate in a challenging and fluid macro environment," Chief Financial Officer Sanjay Datta said on the third-quarter earnings call. Indeed, loan volume fell 34% in the latest quarter.

In 2020 and 2021, Upstart registered impressive revenue growth, as well as positive net income, primarily due to the favorable macroeconomic backdrop. But the Federal Reserve's aggressive rate-hiking policy created a major headwind for the company, one that it is still dealing with.

The risks can't be ignored

Upstart's innovative business model and product offering are definitely interesting. By analyzing more than 1,600 variables about a potential borrower, it claims it can better assess credit risk than the traditional Fair Isaac FICO model. This can open up revenue opportunities for the more than 100 lending partners using its platform, while expanding access to credit for more potential borrowers.

And by applying AI to a legitimate service, Upstart has found a real application for this revolutionary technology. This is what early investors were drawn to.

However, I think the range of outcomes for the company's trajectory over the next 10 years is much too wide to say with any level of confidence that this can be a millionaire-maker stock. Upstart's financial results, as we've seen, are extremely sensitive to the economy. To be fair, in robust times, this is a profitable business that can post strong growth. But when times get tough, its survival is in question.

In other words, this has proved to be a highly cyclical company that depends on factors outside of its control for its success. What if there's a severe recession in the next six to 12 months? Or what if the U.S. economy is characterized by higher inflation and interest rates as the new normal? This doesn't make Upstart an attractive investment at all.

Investing is a long-term game. This means trying to figure out what a company will look like a decade from now. I don't think anyone, no matter how smart they are, can predict where Upstart will be 10 years from now. It could be a hugely successful enterprise if everything goes its way, or the business could no longer exist.

There's just too much uncertainty. And because of that, I'm not confident saying that it can be a millionaire-maker stock.