Investors in Upstart Holdings, Inc. (NASDAQ: UPST) are being notified that the deadline to apply for the role of lead plaintiff in a federal securities class action lawsuit against the company is June 8, 2026.
The lawsuit alleges that Upstart and certain executives violated federal securities laws by making false and/or misleading statements between May 14, 2025, and November 4, 2025. The allegations center on the company's flagship "Model 22" AI-powered credit underwriting model.
According to the complaint, the defendants failed to disclose key facts to investors. These include that Model 22 frequently overreacted to negative macroeconomic signals during its risk separation process. Consequently, the model's overall accuracy and its ability to increase loan approval rates were overstated. The complaint further alleges that the model's overly conservative assessments of credit and macroeconomic conditions significantly and negatively impacted Upstart's revenue results, rendering the company's previously issued full-year 2025 revenue guidance unreliable and unrealistic.
The truth allegedly began to emerge on November 4, 2025. On that day, Upstart reported its Q3 2025 financial results, posting revenue of $277 million. This figure fell short of the company's prior guidance of approximately $280 million, though it exceeded market expectations of $262 million. The company also revised its Q4 2025 revenue outlook down to $288 million, well below the market consensus of $303.7 million. Furthermore, Upstart lowered its full-year 2025 revenue guidance from approximately $1.055 billion to about $1.035 billion and reduced its fee revenue expectation from roughly $990 million to approximately $946 million.
During the subsequent earnings conference call, company executives attributed the disappointing performance to Model 22. They acknowledged the model had "overreacted" to macroeconomic signals during the quarter, which reduced borrower approval and conversion rates. Executives also admitted to having "intentionally" calibrated the model to be "more conservative on credit earlier in the quarter."
These disclosures reportedly caused Upstart's stock price to drop by $4.49, or 9.71%, closing at $41.75 on November 5, 2025. Investors who purchased Upstart securities during the class period and suffered losses are encouraged to contact the law firm before the June 8 deadline to discuss their legal options, including seeking appointment as lead plaintiff to represent the class and direct the litigation.
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