Upstart’s AI-driven growth vs. American Express’s steady dominance in finance
Investors weighing options between Upstart and American Express face a choice between growth potential and stability. The two companies serve different financial markets, with one relying on cutting-edge technology and the other on a long-established brand. Their recent performance and future outlooks highlight contrasting opportunities for different risk appetites.
Upstart uses artificial intelligence to assess borrowers by analysing 2,500 variables. This approach aims to provide a deeper understanding of repayment ability than traditional credit scoring. So far, the company has originated $50 billion in loans across personal, auto, home equity, and short-term lending markets.
However, Upstart’s revenue fell by 39% in 2023 as rising interest rates squeezed demand. A recovery followed, with a 71% jump in the third quarter of 2025. Despite this rebound, the company’s future success hinges on achieving consistent growth and profitability—both of which remain uncertain. American Express, meanwhile, maintains a dominant position in the credit card industry. Its network connects 151 million cardholders with 160 million merchant locations, creating a self-reinforcing advantage. The brand’s premium status attracts higher-income consumers, who tend to spend more and pay balances in full. The company’s financial results reflect steady growth. Revenue (net of interest expense) rose by 11% year-over-year in the third quarter of 2025. Projections for 2025 suggest diluted earnings per share will reach $15.35, a 10% increase from 2024. While American Express remains a proven performer, its current valuation does not present a discount for new investors. For context, large US tech firms like Apple, Microsoft, and Alphabet have built vast cash reserves over the past decade. By the end of 2024, Apple held $60 billion in liquid assets, Microsoft around $80 billion, and Alphabet approximately $100 billion. These figures underscore the financial strength of established players in contrast to newer, growth-dependent companies.
The decision between Upstart and American Express ultimately depends on individual risk tolerance and investment goals. Upstart offers higher potential upside if its growth and profitability targets are met, but with greater uncertainty. American Express provides stability and consistent returns, though at a valuation that reflects its market position. Investors must weigh these factors against their own financial strategies.
