What Happened?
Shares of online used car dealer Carvana (NYSE: CVNA) fell 3.8% in the afternoon session after Hertz Global Holdings announced it will begin selling certified used cars on Amazon.com, a move that introduces a significant new competitor into the online vehicle market. The move allows shoppers to browse, finance, and purchase Hertz's pre-owned vehicles through the e-commerce giant's platform, Amazon Autos. This development is viewed as a direct challenge to Carvana's online sales model, raising concerns about increased competition in the digital used car market. Investors appear worried that the partnership between Hertz and Amazon could negatively impact Carvana's sales and market share. Furthermore, the new arrangement could lead to fewer of Hertz's used vehicles being sold through the Carvana platform, directly affecting its inventory and sales channels.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Carvana? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Carvana’s shares are extremely volatile and have had 42 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was about 22 hours ago when the stock dropped 4.3% on the news that investor apprehension intensified ahead of a key policy speech and perplexing inflation signals clouded the economic outlook, leading to a wider market retreat from growth-oriented stocks. The downturn in the market was largely attributed to a significant sell-off in megacap tech and chipmaker shares. Nvidia, Advanced Micro Devices (AMD), and Broadcom all saw notable drops, dragging down the VanEck Semiconductor ETF. Other major tech-related companies like Tesla, Meta Platforms, and Netflix were also under pressure. A key reason for this trend is that much of the recent market gains have been concentrated in the "AI trade," which includes these large technology and semiconductor companies. So this could also mean that some investors are locking in some gains ahead of more definitive feedback from the Fed.
Carvana is up 66.3% since the beginning of the year, but at $331.83 per share, it is still trading 15% below its 52-week high of $390.17 from July 2025. Investors who bought $1,000 worth of Carvana’s shares 5 years ago would now be looking at an investment worth $1,638.
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