Bears who bet heavily against Upstart (UPST) won the short bet. The firm is a lender that approves borrowing based on algorithms. Before the Q2 report, UPST stock traded as high as $72.58. It closed at $33.50 after posting ordinary Q2 results. Revenue was only $135.8 million. In Q3, it expects revenue of $140, $15.5 million below Capital IQ’s consensus.
Upstart has no further business rationalization and automation that would cut costs further. The business model is flawed. It lends to millennials that have limited funds.
In the supercomputer and AI space, Super Micro (SMCI) posted revenue growing by 32.9% to $2.18B. Despite its Q1/24 revenue and EPS above consensus, the stock fell from $346 to $354 post-earnings. The supply chain is holding back its sales. Growth has room to run for many years.
In the gaming sector, Roblox (RBLX) reported a staggering 46 cents a share loss. Average daily users and average monthly unique payers grew by 25% and 19%, respectively. The loss is unsettling. Parents gifted their children with funds to spend on the platform during the pandemic. But the company has a high-cost overhead as it pays developers a high salary, bonus, and stock-based compensation.
Watch SMCI but avoid Upstart and Roblox
