Giverny Capital Asset Management, LLC, an investment management company, recently published its first-quarter 2025 investor letter. A copy of the letter can be downloaded here. The portfolio returned -3.39% in the quarter, compared to a -4.27% return for the S&P 500 Total Return Index. For the year ended March 31, 2025, the fund returned 1.75% compared to an 8.25% return for the Index during the same period. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its first quarter 2025 investor letter, Giverny Capital Asset Management highlighted stocks such as CarMax, Inc. (NYSE:KMX). CarMax, Inc. (NYSE:KMX) is a used vehicle retailer headquartered in Richmond, Virginia. The one-month return of CarMax, Inc. (NYSE:KMX) was -9.90%, and its shares lost 4.89% of their value over the last 52 weeks. On April 17, 2025, CarMax, Inc. (NYSE:KMX) stock closed at $64.59 per share with a market capitalization of $9.862 billion.

Giverny Capital Asset Management stated the following regarding CarMax, Inc. (NYSE:KMX) in its Q1 2025 investor letter:

“We trimmed CarMax, Inc. (NYSE:KMX) during the quarter – it has been a rough few years for the used car retailer. I believe the customer friendly business model remains attractive, but a lot of Wall Street capital has flowed to Carvana, creating a more difficult competitive environment. In early April, Carmax reported encouraging operating results. Yet despite heavy investment in online selling capabilities, Carmax is not gaining market share. We adjusted the position size to acknowledge that fact.”

A happy customer inspecting a newly purchased used car with the help of a sales assistant.

CarMax, Inc. (NYSE:KMX) is not on our list of 30 Most Popular Stocks Among Hedge Funds.  As per our database, 57 hedge fund portfolios held CarMax, Inc. (NYSE:KMX) at the end of the fourth quarter compared to 44 in the third quarter. In the fourth quarter of financial year 2025, CarMax, Inc. (NYSE:KMX) reported total sales of $6 billion, up 7% from prior year’s quarter. While we acknowledge the potential of CarMax, Inc. (NYSE:KMX) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

We covered CarMax, Inc. (NYSE:KMX) in another article, where we shared top stock picks from Diamond Hill Capital. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.