We recently released a list 15 high-growth companies hedge funds are buying. In this article, we will look at the position of Carvana Co. (NYSE:CVNA) against other high-growth stocks.
The global economy is expected to face modest growth in 2025 due to ongoing challenges, with U.S. GDP forecast at 2%, euro zone at 0.9%, and China at 4.2%. Inflation may remain high due to increased fiscal spending and potential tariffs, and the potential room for central banks to lower, resulting in uncertainty and possible volatility. But productivity gains driven by AI and other emerging technologies offer long-term hope. The U.S. is expected to benefit the most from these gains, and Europe may lag behind due to slower investment and technology adoption.
According to Deutsche Bank Wealth Management, policies are shifting from currency to fiscal, and countries such as China are expected to launch growth plans. Stocks, especially U.S. stocks, are favored by investors and are supported by profit growth and favorable policy expectations. Bond markets and commodities also provide opportunities, and infrastructure investment is considered a long-term growth area. Similarly, despite the current market uncertainty, BlackRock believes there is reason to remain optimistic about developed market stocks in the next 6 to 12 months. The U.S. Treasury once acted as a safety net when stocks fell and has not provided the same protection lately. Furthermore, the dollar has lost its pace in the recent sell-off, which is unusual. As a result, some investors are turning to alternatives such as gold, which have reached record highs. The rise of artificial intelligence is also reshaping the market, allowing people to concentrate more on some large-scale technology names. This can enhance returns, but also increase risks. Private capital also has demand, although higher interest rates may be weighed in future returns.
As the market becomes increasingly unpredictable, many investors are beginning to follow hedge funds, hoping they can repeat last year’s strong returns and stay ahead. In 2024, hedge funds issued outstanding results, taking advantage of market volatility and policy shifts. The average return by November was 10.7%, which is a significant improvement from the 5.7% return in the same period in 2023. The rise has been backed by market turmoil, changes in central bank policies and uncertainty surrounding the U.S. presidential election. It is worth noting that some hedge funds have made amazing returns, such as Light Street Capital’s Long/Short Tech Fund soaring 59.4%, while macro-centric fund Discovery Capital has a return of 52%. Bridgewater’s Pure Alpha Fund rose 11%, with Marshall Wace, a major UK hedge fund, garnering impressive returns in several of its funds, including its Eureka Fund with a return of 14%. Multi-strategy funds such as Citadel and Millennium also performed well.
Customers purchase used cars with the help of financial experts.
In this article, we used the Finviz filter and filtered stocks with revenue growth of more than 20% over 5 years, verifying this information from other sources. We selected 15 stocks with the highest hedge fund sentiment from Insider Monkey's database (Q4 2024) to compile this list. We rank the list from the minimum to the majority of hedge fund holders.
Why are we interested in stocks that hedge funds to accumulate? The reason is simple: Our research shows that we can beat the market by mimicking the top stocks of the best hedge funds. Our strategy for quarterly newsletters selects 14 small and large stocks every quarter, returning 373.4% since May 2014, beating its benchmark by 218 percentage points (See more details here).
Number of hedge fund holders: 84
Average 5-year revenue growth: 39.43%
Carvana Co. (NYSE:CVNA) is an Arizona-based company that facilitates online purchases and sales. The company handles all parts of the process, from finding and inspecting cars to providing financing, delivering vehicles, and providing support after sales. On April 22, Piper Sandler maintained an overweight rating on CVNA and raised his target share price from $225 to $230. Despite the decline in inventory and rising prices, Cavana is expected to continue to grow if the car credit is available. Strong first quarter results led to Piper Sandler's higher target goals and positive prospects for late 2025.
In 2024, based on adjusted EBITDA profit margins, Carvana Co. (NYSE: CVNA) made history by becoming the most profitable bus retailer in the United States. The company has attributed more than 100 years and $10 billion in investments to help build a unique business model focused on customer experience and strong financial performance. In the fourth quarter, Carvana's adjusted EBITDA margin reached 10.1% and a net income margin of 4.5%, which is the first year of the company's first net income in each quarter.
Carvana Co. (NYSE:CVNA)'s fourth-quarter unit sold 50% year-on-year to 114,379, although it was a slower season. The company has reached new highs in gross profit, operating income and other financial indicators, and the company plans to further expand its vehicle selection and production in 2025 to surpass its current market share, which is nearly 1%.
Carvana Co. (NYSE:CVNA)’s 84 hedge funds are bullish, compared with 66 funds in the last quarter, according to Insider Monkey’s fourth-quarter database. CAS Investment Partners is a major stakeholder of the company, with 6.3 million shares worth $1.3 billion.
Overall, CVNA Ranked 15th Among high-growth companies, hedge funds are buying. Although we acknowledge the potential of CVNA as an investment, our belief is that AI stocks have greater hope to deliver higher returns and be conducted in a shorter time frame. AI stocks have risen since the beginning of 2025, while popular AI stocks have lost about 25%. If you are looking for AI stocks that are more promising than CVNA but have less than 5 times its earnings, check out our report The cheapest AI stock.
Read next: According to billionaires, there are 20 best AI stocks available now, and 30 best stocks to buy now. Disclosure: None. This article was originally published in Internal monkey.