Carvana (CVNA) Surges 3.27% on Earnings Optimism and EV Momentum – What’s Fueling the Rally?

Summary
• Carvana’s stock (CVNA) surges 3.27% intraday to $366.51, hitting a 52-week high of $367.84.
• Earnings estimates for Q2 and FY2025 show 92.2% and 218.9% YoY growth, with 5.2% and 1.5% upward revisions in the past 30 days.
• EV sales now 9% of Carvana’s retail units, driven by SUV demand and expanded electrified vehicle inventory.
• MACD (7.29) and RSI (53.16) signal bullish momentum, while the Defiance 2X CVNA ETF (CVNX) jumps 5.88% on heavy volume.
Carvana’s rally reflects a confluence of earnings optimism, electrified vehicle adoption, and robust technical indicators. With the stock trading near its 52-week peak and options volatility surging, traders are weighing whether this is a breakout or a correction in the making.

Earnings Revisions and EV Adoption Drive CVNA’s Rally
Carvana’s 3.27% intraday surge is fueled by two key catalysts: upward revisions to earnings estimates and a record 9% electrified vehicle (EV) sales mix. Analysts have raised Q2 and FY2025 EPS estimates by 5.2% and 1.5% respectively, reflecting confidence in the company’s revenue growth (32% QoQ, 35.5% YoY). Simultaneously, the EV Trends Report highlights a 9% share of EV/PHEV sales in Q2 2025, up from 2% in 2023, driven by SUV demand and expanded inventory. These factors, combined with a Zacks Rank 3 (Hold) and a 73.27% YTD gain, have ignited short-term bullish momentum.

Automotive Retail Sector Gains Momentum as Carvana Outperforms
The Automotive Retail sector, led by Carmax (KMX), shows mixed performance. While Carvana’s stock surges 3.27%, KMX declines -0.11% intraday, highlighting divergent investor sentiment. Carvana’s outperformance stems from its EV adoption strategy and earnings revisions, whereas KMX faces pressure from broader retail challenges. The sector’s 0.3% gain over the past month pales against Carvana’s 1.1% return, underscoring its unique growth drivers.

Leveraged ETFs and Call Options Signal Bullish Bias – Strategic Entry Points Identified
• MACD: 7.29 (above signal line 6.83, bullish)
• RSI: 53.16 (neutral to overbought)
• 200D MA: 257.26 (well below current price)
• Bollinger Bands: Price at 366.51, near upper band (375.33), indicating overbought conditions.
Carvana’s technicals suggest a continuation of the bullish trend, with key support at 344.98 and resistance at 375.33. The Defiance Daily Target 2X Long CVNA ETF (CVNX) and YieldMax CVNA Option Income ETF (CVNY) offer leveraged exposure, with CVNX up 5.88% on heavy volume. For options, two call contracts stand out:
• CVNA20250815C365: Strike $365, Expiry 8/15, IV 47.54%, Leverage 33.32%, Delta 0.5175, Theta -1.4369, Gamma 0.0146, Turnover 52,925. High leverage and moderate delta position this for a 5% upside (target $384.84) with manageable time decay.
• CVNA20250815C370: Strike $370, Expiry 8/15, IV 48.01%, Leverage 41.45%, Delta 0.4458, Theta -1.3252, Gamma 0.0144, Turnover 216,060. High liquidity and gamma make this ideal for a breakout above $367.84, with a 5% upside target of $388.51.
Aggressive bulls may consider CVNA20250815C370 into a break above $367.84, while CVNA20250815C365 offers a lower-cost entry for a sustained rally.

Backtest Carvana Stock Performance
The backtest of CVNA's performance following a 3% intraday increase shows favorable results. The strategy achieved an 88.01% return, surpassing the benchmark return of 84.65% by 3.37%. With a maximum drawdown of 0.00% and a Sharpe ratio of 0.12, the strategy demonstrated robust risk management and profitability.

Bullish Momentum Intact – Aggressive Bulls Target $370 as Next Catalyst
Carvana’s rally is underpinned by earnings optimism, EV adoption, and robust technicals. The stock’s proximity to its 52-week high and the 200D MA at 257.26 suggest a continuation of the bullish trend. Investors should monitor the $370 level, where the CVNA20250815C370 call option becomes pivotal. Meanwhile, sector leader Carmax (KMX) lags with a -0.11% intraday decline, highlighting Carvana’s unique momentum. Aggressive bulls may consider CVNA20250815C370 into a break above $367.84, while hedging with the 365-strike call for a balanced approach.