Instacart $CART ( ▲ 1.62% ) had a week that felt like a grocery aisle slip-and-slide. The stock jumped after the company announced a new integration that lets users check out directly inside ChatGPT, making Instacart the first brand to offer an instant shopping experience through the AI chatbot. Investors loved the idea and pushed shares higher.
Then Wednesday arrived. A separate report accused Instacart’s AI powered price experiments of showing different customers different prices for the same items, sometimes by as much as 23 percent. Whatever the stock gained earlier in the week was wiped out, sending shares down roughly 6 percent.
The timing is tough because Instacart has been betting big on AI to shore up a business that already runs on razor thin margins. In the latest quarter, the company handled 9.17 billion dollars in grocery orders and kept about 7 percent of that, roughly 670 million dollars. That alone wouldn’t cover operating costs, but advertising and other high margin services added another 270 million dollars, helping Instacart squeeze out a 166 million dollar operating profit.
The problem is growth has slowed, and competition is only getting louder. Amazon $AMZN ( ▲ 0.87% ) expanded its same day grocery delivery to more than 2,300 U.S. cities this week, using its Prime base as built in demand. When Amazon walks into your aisle, things tend to get uncomfortable.
Some on Wall Street think AI may make that pressure even worse. Wedbush analysts named Instacart as one of the potential “AI losers,” arguing that automation will make logistics more efficient for companies that already own the customer relationship, like Amazon, and less favorable for intermediaries like Instacart.
If they’re right, AI may help Instacart or it may push shoppers straight into Amazon’s cart.