Beyond AI Buzz: Carvana (CVNA) Shines as Hidden Gem

Beyond AI Buzz: Carvana (CVNA) Shines as Hidden Gem

Wed, September 9, 2026 at 5:05 PM GMT+3 4 min read

• CVNA -1.00%

Octahedron Capital, a growth-focused investment firm, issued its second-quarter 2026 investor letter. The letter can be downloaded here. In August, the firm posted strong results for both its long-only and long-short strategies, with the former reaching mid-to-high-20% year-to-date returns and the latter in the mid-teens. Although 2026 had a difficult start, with a correlated sell-off in software and internet sectors, the long-only strategy only fell to approximately -15% at its lowest point. Effective risk management provided stability, and August saw a notable rebound driven by increased long positions in infrastructure software and consumer internet. Looking ahead, the firm sees a promising outlook for semiconductors, prompting increased investments in memory, computing, and semi-equipment sectors, as well as in an AI semiconductor fund currently in beta testing. Also, please check the fund's top five holdings to learn about its best picks in 2026.

In its second-quarter 2026 investor letter, Octahedron Capital highlighted Carvana Co. (NYSE:CVNA). Carvana Co. (NYSE:CVNA) is a US-based used car retailer that operates an e-commerce platform. On September 08, 2026, Carvana Co. (NYSE:CVNA) closed at $74.72 per share. Over the past month, Carvana Co. (NYSE:CVNA) returned 3.09%, and its shares are up 2.32% over the past year. Carvana Co. (NYSE:CVNA) has a market capitalization of $82.82 billion, and its stock has traded within a 52-week range of $54.46 to $97.38.

Octahedron Capital stated the following regarding Carvana Co. (NYSE:CVNA) in its Q2 2026 investor letter:

"In a world dominated by AI headlines, it is easy to forget that there are potentially excellent investments, such as Carvana Co. (NYSE:CVNA), available in the public market these days. Our investors might also remember that we interviewed Carvana CEO, Ernie Garcia, at our 2025 LP meeting. Carvana is a top five position for Octahedron as of August 31st, (that also include Intel, Nubank, Meta and Amazon). The story of Carvana has always been simple: The company is disrupting a ~$1T used car industry in the US, fixing a broken experience, building a scaled machine and winning share in a fragmented industry digitizing one of the last remaining areas of retail that has not been well penetrated by e-commerce. We have scaled up the position in Carvana over the last 6 months because we believe missteps in execution from 2H25 are now mostly remedied, which is now leading to a re-acceleration in unit growth as well as a recovery in profitability.

Our thesis is as follows: 1. All-time low labor hours per unit of refurbishment: Carvana is achieving this with new in-house technology around employee shift scheduling and overtime management, as well as centralizing many planning functions that needed to be done on-site. In addition, the in-house training program has cross trained many employees who provide flexibility across multiple functions in the inspection and reconditioning centers ("IRCs"). This should lead to higher retail gross profit per unit ("Retail GPU")..." (Click here to read the full text)

Carvana Co. (NYSE:CVNA) is not on our list of the 40 Most Popular Stocks Among Hedge Funds. According to our database, 87 hedge fund portfolios held Carvana Co. (NYSE:CVNA) at the end of the second quarter, compared to 79 in the previous quarter. While we acknowledge the potential of Carvana Co. (NYSE:CVNA) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we discussed Carvana Co. (NYSE:CVNA) and shared Optimist Fund's views on the company. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.

READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years.

This article is originally published at Insider Monkey.