Morgan Stanley noted Upstart’s shift toward super-prime borrowers, who accounted for 26% of originations in Q2 2025, as well as a year-over-year improvement in delinquencies.

In this photo illustration, the Upstart Holdings logo is seen displayed on a smartphone screen. (Photo Illustration by Thomas Fuller/SOPA Images/LightRocket via Getty Images)

Prabhjote Gill·Stocktwits

Updated Oct 01, 2025 | 9:42 AM GMT-04

Add us on

Shares of Upstart Holdings (UPST) rose in pre-market trading after a Morgan Stanley report provided a more balanced view and BTIG revised its prior estimate for 30+ day delinquencies in August.

UPST’s stock was up more than 5% amid broader weakness in the U.S. stock market stemming from the government shutdown. Retail sentiment around the stock jumped higher within ‘extremely bullish’ territory amid ‘extremely high’ levels of chatter over the past day.

In its July report, BTIG had projected August weighted-average 30+ day delinquency exceeding 11.2%. On Wednesday, the firm revised that figure down to 6.2%, up from 6.1% in July and 5.4% in June, according to TheFly.

Morgan Stanley, meanwhile, highlighted positive trends for the AI-powered lending platform in its report, as cited by Investing.com. It noted Upstart’s shift toward super-prime borrowers, who made up 26% of originations in the second quarter (Q2) of 2025. The firm emphasized that while Upstart still lends heavily to near and subprime borrowers, which makes comparisons to traditional prime lenders difficult, delinquencies remain down year-over-year (YoY), falling 242 basis points for 30+ day and 212 basis points for 60+ day delinquencies.

Morgan Stanley also noted that August ABS trust data showed modest month-over-month increases, with 30+ day delinquencies up 49 basis points and 60+ day delinquencies up 41 basis points – nowhere near a spike that BTIG had initially estimated. The firm stated that 2025 trust performance was slightly behind that of 2024 and significantly below the 2020-2021 vintages, yet still superior to the 2022-2023 vintages.

Morgan Stanley said this suggests gradual improvements in underwriting quality, helping reassure investors after recent concerns.

UPST’s stock has fallen more than 14% this year but gained over 32% in the last 12 months.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Add us on

Read about our editorial guidelines and ethics policy