Shares of online grocery delivery platform Instacart (NASDAQ:CART) fell 6.4% in the afternoon session after BTIG downgraded the stock to Neutral from Buy, citing intensifying competitive pressure.

The analyst noted that in just two weeks, grocers representing over 25% of Instacart's gross order value had signed partnerships with rivals like Amazon, DoorDash, or Uber. This raised questions about the company's growth path. The downgrade followed news from the previous session that competitor DoorDash and supermarket giant Kroger were expanding their grocery delivery partnership. This directly challenged Instacart, as Kroger was its third-largest customer and accounted for over 10% of its gross transaction value.

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Instacart’s shares are quite volatile and have had 16 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 about 23 hours ago when the stock dropped 8.7% on the news that reports revealed that rival DoorDash Inc. and supermarket giant Kroger Co. are expanding their partnership for grocery delivery starting next month, intensifying competition.

The news directly impacts Instacart as Kroger is its third-largest customer, accounting for over 10% of the company's gross transaction value. Wedbush analysts noted the move "directly challenges Instacart's position among intermediaries," adding to Wall Street's concerns about the company's ability to compete. This development amplifies existing competitive pressures from major players like Amazon and Walmart, who have been making their own aggressive pushes into grocery delivery. In recent months, analysts have already cited heightened competition from Amazon's expanding services as a reason for concern, suggesting Instacart's market share is at risk of eroding in an increasingly crowded market.

Instacart is down 17% since the beginning of the year, and at $35.74 per share, it is trading 32.8% 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 $1,060.

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