Al Root

Amazon entering any new business can make investors in that business a little nervous. Amazon has disrupted -- or tried to disrupt -- retail, industrial distribution, logistics, groceries, tech, the internet, and a few others.

Now it's expanding into car selling, which is introducing some volatility to sector stocks.

Hertz and Amazon surprised investors on Wednesday, announcing a partnership to sell used Hertz vehicles on the Amazon Autos platform. Amazon launched Amazon Autos in late 2024 with a partnership with Hyundai Motor. Hertz is its first fleet customer.

Amazon's strategy, so far, doesn't appear to represent more competition for used car dealers looking for inventory. It is another potential outlet for car sellers looking to post inventory online to reach the maximum number of buyers. Amazon Auto is a new competitor for online platforms, such as Cars.com, where car buyers often start searches for their next vehicle.

Car dealer Carvana is a little different, though. It gets inventory from Hertz. Its stock dropped almost 2% on Wednesday. That might have been an overreaction, according to Citi analyst Ronald Josey.

"Given about 80% of Carvana's inventory is from consumer-sourced trade-in, we do not believe there could be an inventory supply risk," he wrote in a Wednesday evening report.

Amazon Auto could have an impact on the industry overall. "With Amazon increasingly working with dealers directly, we are watching for traffic pressures to CarGurus over time," he added.

Shares of car shopping site CarGurus slipped 2.2% on Wednesday. Josey rates CarGurus stock Hold and has a $37 price target for shares. He rates Carvana stock Buy and has a $490 price target for shares.

He also rates ACV Auctions stock Buy and has a $17 price target for shares. The online wholesale marketplace is Amazon's data and technology partner. "We view it as a beneficiary of Amazon Autos," Josey added.

ACV stock fell 1.1% on Wednesday. Shares were down 0.7% in early trading on Thursday at $11.30, while the S&P 500 and Dow Jones Industrial Average were down 0.3% and 0.5%, respectively. Carvana stock was down 1% in early trading at $335.25, and CarGurus shares were down 0.2% at $31.68.

Hertz stock added 6% on Wednesday. Shares were down 4.5% in early trading on Thursday.

Write to Al Root at allen.root@dowjones.com

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August 21, 2025 11:06 ET (15:06 GMT)

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