We recently published a list of 10 Firms Heavily Hit by Market Pessimism. In this article, we are going to take a look at where Carvana Co. (NYSE:CVNA) stands against other firms heavily hit by market pessimism.

Wall Street finished in the red territory on Tuesday, as investors repositioned their portfolios ahead of the Fed rate decision on Wednesday.

The Nasdaq dropped the highest among its peers, declining 1.71 percent. The S&P 500 followed with a 1.07-percent loss, while the Dow Jones decreased by 0.62 percent.

The market pessimism spilled over to various sectors, with 10 companies notably hit the most.

In this article, we have identified the 10 worst performers on Tuesday and detailed the reasons behind their drop.

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

A customer buying a used car with the help of a finance specialist.

Carvana Co. (NYSE:CVNA)

Carvana dropped its share prices by 10.71 percent on Tuesday to finish at $166.52 apiece as investors stayed on the sidelines amid the lack of fresh catalyst to boost buying appetite.

In recent news, CVNA announced a foray into the new-car selling business, signaling a new business strategy to complement its core used cars selling business.

Earlier this month, CVNA announced that it finalized a deal on February 28 to acquire a franchised dealership in Arizona, signaling a potential shift into new vehicle sales for the online retailer, which has been focusing on selling used cars since its launch in 2013.

CVNA appears to be following in the footsteps of its competitor CarMax, which also ventured into the new cars business in the mid-1990s when it secured a franchise of Chrysler, a move that was later discontinued to focus entirely on used cars.

Overall, CVNA ranks 4th on our list of firms heavily hit by market pessimism. While we acknowledge the potential of CVNA 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 CVNA but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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