What Happened?

Shares of online grocery delivery platform Instacart (NASDAQ: CART) fell 7.5% in the morning session after analysts from Wedbush expressed a bearish view on the company, citing fierce competition and reports of declining performance metrics. Wedbush assigned the company an "Underperform" rating, pointing to the threat from major retailers like Amazon and Walmart.

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What Is The Market Telling Us

Instacart’s shares are quite volatile and have had 18 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 12 days ago when the stock dropped 3.3% on the news that investor concerns grew over increased competition as grocery giant Kroger launched its delivery service on the Uber Eats and Postmates apps. The partnership expanded Kroger's delivery options across nearly 2,700 of its stores nationwide, including banners like Ralphs and Fred Meyer. This development placed Kroger's full range of products in direct competition with Instacart on major on-demand delivery platforms. The stock's decline to a near two-month low reflected worries that this new, convenient option for shoppers could chip away at Instacart's market share.

Instacart is down 15.5% since the beginning of the year, and at $37.09 per share, it is trading 30.2% below its 52-week high of $53.15 from February 2025. Investors who bought $1,000 worth of Instacart’s shares at the IPO in September 2023 would now be looking at an investment worth $1,100.

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