The meme-stock frenzy is seemingly making a comeback in 2025 as investors once again chase unprofitable companies for their latest bets.
To this end, according to data from Bespoke Investment Group, 10 of the 14 Russell 3000 stocks that have tripled since the April 8 market bottom are unprofitable.
By late June, the index’s 858 money-losing stocks had gained an average of 36%, beating their profitable peers.
Meanwhile, while technology giants like Nvidia (NASDAQ: NVDA) and the S&P 500 have climbed steadily, names like Avis Budget Group (NASDAQ: CAR) and Carvana (NYSE: CVNA) have surged. Avis is up 161% since April, and Carvana has jumped 108%, far outpacing the broader index.
Still, despite their meme-stock labels, both companies have some fundamental support behind the rally.
Avis Budget Group
The car rental giant, which first shot to meme-stock fame in 2021, is benefiting this year from operational improvements and tariff-driven demand shifts.
Although Q1 revenue fell 4.7% year-over-year to $2.43 billion, Avis beat EBITDA expectations with a smaller $93 million loss. Management’s focus on higher-margin rentals and better vehicle utilization is paying off, with Q2 adjusted EBITDA projected to exceed $200 million.
Additionally, President Donald Trump’s proposed 25% tariff on imported cars at the time increased expectations for rental demand and fleet values.
As of press time, Avis (CAR) was trading at $177, down 2% on the day but up 120% year-to-date.
Carvana
Similarly, Carvana has staged an impressive rally on the back of a strong start to the year. In Q1, revenue jumped 38% to $4.2 billion, with retail sales up 46% to nearly 134,000 vehicles. Net income more than doubled to $373 million, while adjusted EBITDA hit a record $488 million.
Moreover, Carvana achieved profitability while operating leaner, with lower inventory and reduced costs.
At the same time, the proposed 25% tariff is also seen as a tailwind for used-car demand. As of press time, Carvana (CVNA) was up 73% for 2025, trading at $346.
Overall, Carvana has posted strong gains in 2025, despite early pressure from a January short call by Hindenburg Research, which raised concerns about $800 million in loan sales to an undisclosed related party that accounted for nearly 26% of its recent gross profit.
Featured image via Shutterstock
