Chewy Inc. (CHWY) shares are having a strong Monday, and the catalyst appears to be a serious vote of confidence from one of the hedge fund world's heavyweights. Viking Global Investors, the firm run by Andreas Halvorsen, has dramatically increased its bet on the online pet retailer, suggesting that smart money sees something the market might be missing.

A Hedge Fund Doubles Down

Here's what happened: Viking Global boosted its Chewy position by nearly 147% on December 18, 2025. That's not a minor adjustment or portfolio rebalancing. The firm added over 8 million shares, bringing its total ownership to approximately 13.5 million shares valued at around $437 million. When a sophisticated investor like Viking makes a move this bold, markets tend to pay attention.

The signal here is that Viking believes Chewy's current stock price doesn't reflect the durability of its core business, particularly its subscription-heavy revenue stream. Pet owners who sign up for automated deliveries of food and supplies tend to stick around, creating predictable recurring revenue. That's the kind of business model that can weather rough patches, and Viking apparently thinks the market is undervaluing that stability.

What makes this especially interesting is that Viking's average purchase price sits above current trading levels. This isn't a quick flip. It's a multi-quarter bet that Chewy's fundamentals will stabilize and market sentiment will eventually catch up. The accumulation signals rising confidence that the stock's downside may be limited at these levels, even though shares have struggled over the past year.

Market Context and Sector Performance

Monday's broader market is showing mixed performance, with the Russell 2000 up 0.21% and the S&P 500 gaining 0.08%. Chewy's climb is happening alongside strength in the consumer discretionary sector. The State Street Consumer Discretionary Select Sector SPDR ETF (XLY) is up 0.4%, indicating that Chewy's move aligns with broader sector trends rather than being completely isolated.

The Technical Picture Gets Complicated

From a technical standpoint, Chewy presents a mixed bag. The stock is currently trading 5% above its 20-day simple moving average, which suggests near-term strength. But it's sitting 4.7% below its 100-day SMA, pointing to longer-term weakness. Over the past 12 months, shares have dropped approximately 4.53% and are positioned much closer to their 52-week lows than highs.

The RSI reading of 44.51 puts the stock in neutral territory, neither overbought nor oversold. Meanwhile, the MACD indicator is below its signal line, which typically suggests bearish pressure. It's a setup that shows momentum hasn't fully turned positive yet, even with Monday's gains.

Traders are watching two key levels: resistance at $35.00 and support at $31.50. Breaking through that resistance level could open up more upside, while failing to hold support might trigger another leg down.

What Analysts See Coming

Eyes are already turning toward Chewy's next earnings report in March. Analyst expectations show a mixed picture: earnings per share are projected at 20 cents, down from 28 cents in the same quarter last year. That's concerning. But revenue is expected to tick up to $3.26 billion from $3.25 billion, showing that the top line is still growing, even if margins might be under pressure.

Despite the challenges, Wall Street maintains a consensus Buy rating on Chewy with an average price target of $45.62. That target implies significant upside from current levels, though it also suggests the stock might be trading at a discount to where analysts think it should be.

The Scorecard Reality Check

Looking at market data rankings, Chewy shows a classic mixed profile. The Value score sits at just 9.65 out of 100, labeled as "Risk," indicating the stock trades at a steep premium relative to peers. The Growth score of 46.96 out of 100 is moderate, suggesting potential exists but is tempered by current headwinds. The Momentum score is weak at 12.44 out of 100, reflecting underperformance relative to the broader market.

This combination reveals what's called a "High-Flyer" setup. There's growth potential, but the low value and momentum scores suggest investors should proceed with caution as the company works through its current challenges.

The ETF Connection

One factor worth watching: Chewy carries significant weight in several retail-focused ETFs. It represents 1.53% of the SPDR S&P Retail ETF (NYSE:XRT), 2.50% of the Amplify Online Retail ETF (NYSE:IBUY), and 4.41% of the ProShares Online Retail ETF (NYSE:ONLN).

Why does this matter? Because when these ETFs see large inflows or outflows, fund managers must automatically buy or sell the underlying stocks to maintain proper weightings. If retail ETFs start attracting serious money, that could create additional buying pressure for Chewy regardless of company-specific news.

Monday's Price Action

At the time of publication Monday, CHWY shares were trading up 5.94% at $34.07, according to market data. That's a solid move, especially in a market showing only modest gains overall. The question now is whether Viking Global's big bet will prove prescient or whether Chewy still has more work to do before its turnaround story convinces the broader market.