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Even as Amazon expands further into same-day grocery delivery, analysts still see room for DoorDash and Instacart to compete. Amazon announced Wednesday that it will expand its same-day delivery of perishable items like meat and dairy to more than 1,000 cities, with plans to reach at least 2,300 locations by year-end. The news put pressure on DoorDash and Instacart, which saw their stocks tumble 4% and 14%, respectively, over the past week. Shares of Walmart, which also provides same-day grocery delivery, lost more than 3% over the same period. But Bernstein analyst Zhihan Ma said the sell-off for Instacart and DoorDash may have been overdone as there’s enough room in the segment for the competitors to maintain market share. “We believe the sell-off in CART and DASH (on the back of the AMZN news) was overdone, with room for the online penetration rates to expand and retailers to increasingly lean into the platforms,” Ma wrote in a Thursday note. For example, Instacart could boost its market share by reducing free delivery thresholds to bring in new customers, Ma said. The analyst sees third-party delivery services having the advantage of greater selection, quick and convenient delivery and the growing benefits tied to the 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),” the analyst said. She echoed a similar sentiment for DoorDash, which she recommended picking up post-sell-off. Even with the pullback, DoorDash shares have advanced nearly 48% so far in 2025. But Ma has a $310 price target for the stock, which suggests shares could rise 25% from where the stock closed on Friday. “Our core thesis on earnings power remains unchanged,” she said. “We will continue to monitor for evidence on AMZN’s encroachment, but for now remain optimistic on the path forward — powered by core Restaurant delivery but also expansion areas and normalized margin opportunity,” she added. Ma’s opinion on DoorDash shares is slightly more optimistic than the average analyst as the consensus view is a potential 17% advance for the stock over the next 12 months. For Instacart, analysts predict shares could rise about 34%, on average. Ma’s $63 price target suggests 43% upside from here. Instacart shares are up 6% year to date. Deutsche Bank analyst Lee Horowitz also expects that Instacart and DoorDash can remain competitive as the pair benefit from a perception of quality and supply because customers can stick with their favorite grocery stores when using these services. “While much remains to be seen as to how this new product changes the grocery delivery landscape, we believe it most likely that it expands the grocery delivery pie more than cannibalizes current e-commerce volume over the short term,” Horowitz said.
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