CVNA Stock Jumps 10% Premarket As Carvana Set To Enter S&P 500, Outpacing Major Tech Rivals

Carvana Co. (NYSE:CVNA) will be joining the S&P 500 index, as part of the quarterly rebalance amid multiple adjustments that will be implemented across the S&P 500, S&P MidCap 400, and S&P SmallCap 600 indices.

S&P 500’s Rebalance

Carvana will be added to the S&P 500 index in the next two weeks, alongside CRH Plc (NYSE:CRH) and Comfort Systems USA (NYSE:FIX). Meanwhile, LKQ Corp (NASDAQ:LKQ), Solstice Advanced Materials (NASDAQ:SOLS), and Mohawk Industries (NYSE:MHK) would be removed from the index. 

The S&P Dow Jones Indices announced the changes on Friday, as part of the index’s regular quarterly rebalance. Carvana stock surged 9.81% in Monday’s premarket, according to data from Benzinga Pro.

Before that, Sandisk Corporation (NASDAQ:SNDK) joined the S&P 500 on November 28, replacing Interpublic Group (NYSE:IPG).

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Carvana’s Performance Strength

Carvana’s inclusion in the S&P 500 comes as a surprise to many investors who had anticipated that larger tech companies or a major crypto entity would be added. Some of the potential candidates for the S&P 500 included Strategy (NASDAQ:MSTR), Marvell Technology (NASDAQ:MRVL), and the social media platform Reddit (NASDAQ:RDDT).

The decision to include Carvana in the S&P 500 follows a period of strong performance for the company. Earlier in December, Carvana’s shares surged amid an upgrade from Wedbush analyst Scott Devitt, who cited the company’s recent results and projected path to three million annual unit sales by 2033.

Carvana’s business model is closely linked to the cost of borrowing, particularly for subprime and lower-prime borrowers. The anticipation of lower interest rates by the Federal Reserve has further bolstered the company’s prospects.

Carvana holds a momentum rating of 84.70% and a growth rating of 99.15%, according to Benzinga's Proprietary Edge Rankings. The Benzinga Growth metric evaluates a stock’s historical earnings and revenue expansion across multiple timeframes, prioritizing both long-term trends and recent performance; the details of other metrics are available here.

Price Target: On a year-to-date basis, Carvana stock climbed 100.33% as per data from Benzinga Pro.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.