Daily Stock Pick for July 26, 2023

Today we’re going to look at a potential “quick hit” opportunity on a stock that’s due to report earnings in a couple weeks.

Now, I don’t know whether said earnings will outperform estimates or not (although one analyst seems to think so)

But what I do know is that there is significant short interest on this stock…

Meaning if it does outperform expectations when it reports earnings, it could trigger massive short covering – and a big runup on this stock.

That’s why I’m highlighting it today.

But you shouldn’t be under any illusions as to what kind of opportunity this is – it’s a short-term speculative one.

So, make sure you manage your risk and adjust your position sizes accordingly.

Upstart Holdings, Inc. (UPST)

Like many AI stocks, AI-lending platform Upstart has been on quite a ride, with its stock having risen by nearly 400% (you read that right) this year. Still, despite this incredible runup, Upstart is still down almost 85% from its all-time high.

That’s why any outperformance in earnings expectations when it reports second-quarter earnings on August 8 could be so powerful. This is especially when you combine it with the heavy short interest on this stock, currently standing at 36.5% of total float.

Add all these factors to the fact that Upstart’s AI lending model is proving to actually be far more accurate than that used by the big banks, a plan to expand into the lucrative small-business loans market, rising contribution margins, and its recent securing of multiple long-term funding agreements to shore up liquidity…

And you have a Q2 earnings report that could surprise – and send the stock surging further.

To your wealth,
Felix @ Ace of Investing