Investors have been turning to small cap stocks, with the Russell 2000 Index up 11% in July. AI industry susceptible to pullbacks as seen with NVIDIA shares falling 13% in five days.
Upstart Holdings Inc., a smaller AI company, has seen significant stock price fluctuations, with shares falling over -21% in 2024, -42% over the past year, and -92% from its all-time high.
Short sellers have targeted Upstart Holdings due to its unsustainable recent gains, with 28.62% of its total shares being shorted, presenting it as an 'Easy AI Bubble Target' for speculation.
Despite high expectations, Upstart Holdings saw disappointing earnings with a trend of negative results. Its EPS was -31 cents in the first quarter of 2024 and a consensus forecast of -34 cents per share for the second quarter.
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