Carvana's Comeback Drives These ETFs Into The Limelight—Tariff Tailwinds Add Fuel

Two years ago, Carvana Co. (NYSE:CVNA) had more in common with a junkyard relic than a growth stock. Following a peak at $376.83 in August 2021, shares plummeted to as low as $3.55 as of December 2022, a 99% eradication that kept bankruptcy rumors swirling louder than its hallmark car vending machines.

Check out CVNA stock's rise here.

But in a plot turn, Carvana staged a 11,000%+ comeback, finishing Thursday at $413.34—its all-time high. That ranks among the most dramatic comebacks in recent market history.

And now a fresh crop of ETFs can be riding shotgun on Carvana’s comeback ride.

From Clunker To Comeback King

Carvana’s recovery wasn’t an anomaly. The company performed a complete teardown and rebuild in 2023, reducing debt, restructuring operations, embracing AI-powered pricing, and investing in its logistics network.

But the actual turbocharge? Tariffs. American duties on foreign-made cars lifted new car prices, sending buyers to lower-priced used cars, the very segment where Carvana is strongest.

This “tariff tailwind” juiced Carvana’s gross profit per unit, particularly in April, and set the stage for its Q2 beat.

What ensued was a market melt-up: analysts rushed to raise price targets, meme-stock chatter resurfaced, and momentum traders descended on the trade.

Also Read: Carvana Shifts Into High Gear After Q2 Beat, Analysts Boost Price Targets

The ETF Angle

Carvana’s rocket ride is now echoing across a number of ETFs, both sector and thematic. Here’s who’s riding the slipstream:

• Defiance Daily Target 2× Long Carvana ETF (NASDAQ:CVNX): This pure-play 2× leveraged ETF gives 2× daily performance of CVNA, so it’s a favorite among thrill-seeking traders. As Carvana soared after earnings, CVNX surged 35%+. Best for short-term momentum trades, but hold on tight—this one’s not for Sunday drivers.

• ProShares Online Retail ETF (NYSE:ONLN): As a significant holding, ONLN provides diversified exposure to online-first retailers. The ETF sits poised to profit from the increasing move toward e-commerce, even for high-ticket purchases such as cars.
• Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY): This consumer discretionary titan offers wider exposure with some CVNA presence. Less oomph than CVNX or ONLN, but more even risk-adjusted returns for long-term investors.

But What’s The Catch?

Carvana’s valuation has soared into orbit, 67× forward earnings, according to Benzinga Pro. Any tech glitch or macro shock (credit tightening, for example) would pop the rally quickly.

However, the tale is no longer speculative. Carvana is demonstrating profits, digital logistics at Scaler, pricing power through AI. And a consumer tailwind fueled by macro policy changes.

Bottom Line

Carvana’s 11,000% surge isn’t simply a meme-driven miracle, but a master lesson in change, fueled by tariffs, technology, and determination. And now, ETF investors have more options than ever to strap themselves in for the ride, whether they want to take it easy (XLY), go for a clever thematic spin (ONLN), or give it flat-out torque (CVNX).

Either way, this is more than just traffic noise.

CVNA Price Action: Carvana shares were down 5.74% during regular trading and up 0.33% in after-hours trading on Friday, according to Benzinga Pro data.

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Photo: Around the World Photos / Shutterstock.com