Carvana (CVNA) Rose as It Exceeded the Investor Expectations

Tapasya Fund, an investment management company, released its fourth quarter 2025 investor letter. A copy of the letter can be downloaded here. The firm celebrated its third anniversary in August 2025 and is happy with the fund’s performance. In 2025, the fund performed well and achieved strong absolute returns, outpacing the S&P 500 and several other market indices. The year was marked by notable developments, especially related to tariffs, which led to substantial fluctuations in the market. There was a swift correction in April, followed by a robust rebound. The theme Artificial Intelligence (AI) has played a crucial role in supporting the market through times of volatility to reach new peaks, reaching over 38 new all-time highs this year. Against this backdrop, the fund returned 23.5% (net) in 2025 compared to a 17.9% return for the S&P 500 Index (with Dividends). The firm’s goal is to avoid any sector-specific bubble bursts, reducing the effect on the portfolio beyond general market downturns. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, Tapasya Fund highlighted stocks such as Carvana Co. (NYSE:CVNA). Headquartered in Tempe, Arizona, Carvana Co. (NYSE:CVNA) is an e-commerce platform for buying and selling used cars. On January 8, 2026, Carvana Co. (NYSE:CVNA) stock closed at $442.58 per share. One-month return of Carvana Co. (NYSE:CVNA) was -2.87%, and its shares gained 129.24% of their value over the last 52 weeks. Carvana Co. (NYSE:CVNA) has a market capitalization of $95.953 billion.

Tapasya Fund stated the following regarding Carvana Co. (NYSE:CVNA) in its fourth quarter 2025 investor letter:

“Carvana Co. (NYSE:CVNA) continues to exceed execution expectations, successfully gaining market share and delivering profitable revenue growth. The recent surge in December was largely attributed to its inclusion in the S&P 500, which also validates our initial investment thesis. Given the significant increase in its valuation, I may look to trim this position in 2026. This potential decision would be driven by seizing higher-return opportunities elsewhere (opportunity cost), rather than a lack of confidence in the company or its management team.”

Carvana Co. (CVNA) "Goes Higher," Says Jim Cramer

Carvana Co. (NYSE:CVNA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 109 hedge fund portfolios held Carvana Co. (NYSE:CVNA) at the end of the third quarter, up from 91 in the previous quarter. While we acknowledge the risk and potential of Carvana Co. (NYSE:CVNA) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than Carvana Co. (NYSE:CVNA) and that has 10,000% upside potential, check out our report about this cheapest AI stock.

In another article, we covered Carvana Co. (NYSE:CVNA) and shared the list of best performing S&P 500 stocks in 2025. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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