Why Carvana Co. (CVNA) Is Surging in 2025

We recently published an article titled Why These 15 Vehicles & Parts Stocks Are Surging In 2025. In this article, we are going to take a look at where Carvana Co. (NYSE:CVNA) stands against the other vehicles and parts stocks.

Certain automotive companies have held up surprisingly well in the current environment, and that’s especially true with companies that supply automotive parts. The high interest rate regime was supposed to crush automotive companies across the board, and early tariffs specifically targeted countries that produced the most automotive parts for the U.S.

Even then. These stocks have done well since high interest rates have made it difficult for low-income consumers to buy new cars. Instead, they have opted for repairing their existing vehicles, which has been a tailwind for automotive parts companies for the past two years. The average age of vehicles was already at a record 12.6 years in 2024, so this tailwind isn’t going away anytime soon.

Customers who have higher incomes have kept on buying new vehicles. It is mostly because of them that consumer spending has held up across the board. Here are the biggest winners from this trend.

Even during bear markets, there are pockets of the market that perform exceptionally well. For example, I identified 15 Financial Services Stocks that are up the Most in 2025 in another article.

Methodology

For this article, I screened the best-performing vehicles & parts stocks year-to-date.

I will also mention the number of hedge fund investors in these stocks. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Carvana Co. (NYSE:CVNA)

Number of Hedge Fund Holders In Q4 2024: 84

Carvana Co. (NYSE:CVNA) is an online used car retailer based in Tempe, Arizona that allows customers to browse, purchase, finance, and trade in vehicles from their homes.

Investor confidence received a boost in early January 2025 when Carvana Co. (NYSE:CVNA) reinstated a $4 billion loan arrangement with Ally Financial. This news prompted RBC to upgrade the stock to Outperform and increase its price target, leading to a 5.03% rise in the share price.

Further momentum came on March 24, 2025, when the stock climbed 10.04% following news of a strategic partnership and positive analyst actions.

Piper Sandler and JPMorgan issued new price targets. The company reported strong performance in late 2024, with profitability in Q3 2024. Carvana is scheduled to report its first quarter 2025 financial results on May 7, 2025.

The consensus price target of $254.76 implies 0.94% downside.

Carvana Co. (NYSE:CVNA) stock is up 26.43% year-to-date.

Overall CVNA ranks 9th on our list of vehicles and parts stocks that are surging in 2025. While we acknowledge the potential of CVNA as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CVNA but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.