Why Avis Budget Group Stock did a U-Turn This Week
Key Points
This was aided greatly by a positive analyst note.
The pundit who wrote it upgraded his recommendation on the car rental giant.
Avis Budget Group (NASDAQ: CAR) stock didn't exactly begin this trading week in the fast lane, but it soon shifted into favor with investors. Following a notable drop on Monday, sentiment on the car rental mainstay improved dramatically. Ultimately, the stock ended the week 28% higher, according to data compiled by S&P Global Market Intelligence.
Safe from disruption?
On Monday, Avis was out of favor with Mr. Market. After market hours on the previous trading day, it announced a secondary share issue and, as usual with such flotations, investors traded out of the stock on fears of dilution.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Image source: Getty Images.
On Tuesday, however, its fortunes suddenly improved with an analyst recommendation upgrade. Jefferies prognosticator John Colantuoni upgraded three stocks in his coverage universe, one of which was Avis. He now feels that the company's shares warrant a buy.
Colantuoni's new take was a general analysis of recent developments in artificial intelligence (AI). According to reports, the analyst believes that Open AI, ChatGPT's owner, is shifting toward a more advertising-based revenue model, in favor of earning a cut of business transactions effected with AI assistance.
Pain at the pump
In the pundit's view, this clears a path for companies like Avis and the grocery delivery service Instacart to benefit directly from AI, rather than compete with it (Instacart and Expedia Group were the other stocks Colantuoni upgraded to buy).
I think Avis, which has benefited from recent chaos at U.S. airports, might be in for a slump -- no matter how effectively it harnesses AI. Surging oil prices are driving up gas prices, making consumers hesitant to rent cars. Inconveniently, the vast majority of Avis cars are traditional, gas-powered models.
Should you buy stock in Avis Budget Group right now?
Before you buy stock in Avis Budget Group, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Avis Budget Group wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $532,066!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,087,496!*
Now, it’s worth noting Stock Advisor’s total average return is 926% — a market-crushing outperformance compared to 185% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of April 3, 2026.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Jefferies Financial Group. The Motley Fool recommends Instacart. The Motley Fool has a disclosure policy.
