Upstart plummets 22% after slashing quarterly guidance on inflation and recession fears

• Shares of Upstart Holdings, a lending platform that uses AI technology, sank after cutting second-quarter projections.
• The company now sees revenue of $228 million, down from earlier estimates of $295 million-$305 million.

Shares of Upstart Holdings slid Friday after the lending platform that uses AI technology cut second-quarter projections.

The stock was down 22% at $22.22 as of 9:35 am ET, nearing its IPO pricing of $20 from December 2020. Shares also toppled 57% in May when the company lowered its yearly revenue projections to $1.25 billion from $1.4 billion.

Late Thursday, the company issued preliminary second-quarter figures showing revenue of $228 million, down from earlier estimates of $295 million-$305 million. Net losses were put at $27 million-$31 million, deeper than the prior estimates for breakeven to a $4 million loss.

"Inflation and recession fears have driven interest rates up and put banks and capital markets on cautious footing," said Upstart co-founder and CEO Dave Girouard in a statement.

The consumer price index in May jumped 8.6%, and a note from Barclays estimates the inflation index to have risen to 8.8% in June.

But despite its current woes, Girouard said he expects Upstart to add to its cash balance after lowering some operating costs in the past quarter. The company would also continue to purchase its own shares.

Full results for the quarter will be released August 8.