What Happened?

Shares of online grocery delivery platform Instacart (NASDAQ: CART) fell 3.8% in the morning session after Wedbush downgraded the stock, citing concerns about increasing competition from Amazon. The firm lowered its rating to 'Underperform' from 'Neutral' and slashed its price target on the stock to $42 from $55. The downgrade was driven by heightened competition from Amazon's expanding same-day perishable grocery delivery service. Wedbush's analysis suggests that as Amazon competes more closely, Instacart's market share is expected to erode over time. The firm believes consumers are increasingly gravitating towards value-driven services, making Amazon's Prime offering a more compelling option for grocery shoppers, which puts pressure on Instacart to protect its position in the market.

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What Is The Market Telling Us

Instacart’s shares are quite volatile and have had 15 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.

Instacart is up 2.9% since the beginning of the year, but at $44.30 per share, it is still trading 16.7% 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 $1,315.

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