Why Avis Budget Group Inc. (CAR) Surged On Thursday?

We recently published a list of 10 Stocks Jump, Defy Market Uncertainties on Thursday. In this article, we are going to take a look at where Avis Budget Group Inc. (NASDAQ:CAR) stands against other stocks that jumped, defying market uncertainties on Thursday.

The stock market extended losses on Thursday, with all the major indices ending in the red as investors continued to sell off positions to minimize risks from the ongoing trade tensions globally.

The tech-heavy Nasdaq fell the hardest, down 0.53 percent, followed by the Dow Jones at 0.37 percent, and the S&P 500 at 0.33 percent.

The broader market decline was mainly weighed down by shares in automakers following President Donald Trump’s announcement of a 25-percent tariff on all vehicles imported to the US.

Meanwhile, 10 companies defied a broader market pessimism amid fresh company developments that buoyed buying appetite. Two gold miners were particularly notable as investors sought safer assets amid the economic uncertainties.

In this article, we listed Thursday’s 10 best performers and detailed the reasons behind their gains.

To come up with the list, we considered only the stocks with a $2-billion market capitalization and $5 million in trading volume.

A close up shot of a family loading their luggage into a car rental vehicle.

Avis Budget Group Inc. (NASDAQ:CAR)

Avis Budget surged by 20.49 percent on Thursday to end at $74.16 apiece on investor confidence that its core car rental business would benefit from the imposition of a 25-percent tariff on new cars manufactured outside the US.

Earlier this week, President Donald Trump announced that the US would begin to impose a 25-percent levy on all vehicles made outside the US beginning April 2.

In a report by Reuters, Stock Trader Network chief strategist Dennis Dick said that rental companies will actually benefit from the tariffs “because if car prices are going to go up, maybe some people who are like, ‘You know what? I don’t travel that much. I’ll just rent a car.”

“You get a little bit of a short squeeze here too and that’s really, really kickstarting this rally,” he added.

JP Morgan also posted confidence that some automotive parts and services firms could benefit from the new tariff announcements as consumers are likely to hold on to existing cars longer than usual, with repair frequency and size both benefiting the sector.

Overall, CAR ranks 3rd on our list of stocks that jumped, defying market uncertainties on Thursday. While we acknowledge the potential of CAR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as CAR but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.