Even if Amazon expands further to the grocery store of the day, analysts can still see the space for Doordash and Instacart to compete. Amazon announced Wednesday that it will expand its perishable items of the day, such as meat and dairy, to more than 1,000 cities, with plans to reach at least 2,300 locations by the end of the year. The news puts pressure on Doordash and Instacart, whose shares have fallen by 4% and 14% respectively over the past week. Walmart shares also offer grocery stores on the day, losing more than 3% during the same period. But Bernstein analyst MA said the sell-offs at Instacart and Doordash may have been overdotted because the division has enough room for competitors to maintain market share. “We believe that the sell-out and DASH sell-offs on the back of AMZN News are overwhelming, online penetration can expand and retailers increasingly tend toward platforms,” Ma wrote in a note on Thursday. Instacart, for example, could increase its market share by reducing the free shipping threshold to attract new customers, MA said. Analysts believe third-party delivery services have greater options, fast and convenient delivery, and growth advantages associated with subscription bundles. “CART continues to have a selection advantage to the degree consumers value ordering from Costco , Kroger etc. and these retailers now need to lean further into the on-demand platforms to compete with AMZN (we saw this post-Whole Foods acquisition); and CART has one of the best products with competitive free delivery thresholds, a wide variety of merchant selection, quick delivery windows (40% of orders are priority), and cost efficiency (optimized network, gig worker model),” said the analyst. She expressed a similar view to Doordash, and she suggested you pick it up after sales. Even with a pullback, Doordash's stock has risen nearly 48% so far in 2025. But MA's stock price target is $310, suggesting that the stock could rise 25% from the stock that closed on Friday. “Our core argument about earnings power remains the same,” she said. “We will continue to monitor evidence about AMZN affair, but are currently optimistic about the path forward, which is backed by core restaurant delivery but is also an opportunity to expand regionally and standardize profits.” MA's view of Doordash stock is more optimistic than the average analyst, as consensus view may be 17% ahead of schedule over the next 12 months. For Instacart, analysts predict that stocks could rise by about 34% on average. MA's $63 price target shows 43% upside from here. Instacart stock has grown 6% per year to date. Deutsche Bank analyst Lee Horowitz also hopes that Instacart and Doordash can remain competitive as the couple benefit from a perception of quality and supply as customers can stick to their favorite grocery stores when using these services. “While it remains to be seen how this new product can change the grocery delivery landscape, we think it is likely to expand the grocery delivery package far exceeds the current e-commerce volume in the short term,” Horowitz said.
Home » Amazon's expansion of grocery delivery is not a death knell for these stocks. This is the reason
Amazon's expansion of grocery delivery is not a death knell for these stocks. This is the reason
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