10:55 AM EDT, 08/21/2025 (MT Newswires) -- Instacart's (CART) position is being "directly challenged" by increasing competition as Amazon ( AMZN ) expands its same day perishable grocery delivery service, Wedbush Securities said in a note Thursday.

Amazon ( AMZN ) said earlier this month it would expand same-day delivery of perishable groceries to 1,000 markets, with plans to reach about 2,300 markets by year end.

The expansion builds on a $9.99-per-month subscription introduced in April 2024, offering free delivery on orders over $35 from Whole Foods, Amazon Fresh, and partner grocers within a two-hour window, according to the report.

Wedbush sees the move, along with Amazon's ( AMZN ) Whole Foods partnership, as a direct challenge to Instacart's membership value proposition.

"The introduction of a more competitive grocery delivery offering could diminish the appeal of intermediaries, such as Instacart," the note said.

The firm said intensifying rivalry from Amazon ( AMZN ), Uber Eats (UBER), DoorDash ( DASH ) , and traditional grocers is expected to erode Instacart's market share and pressure profitability as the company leans on incentives and promotions to retain customers.

"We are increasingly cautious on management's ability to achieve its longer-term targets as competitive pressures build," Wedbush said.

Wedbush downgraded Instacart to underperform from neutral and lowered its price target to $42 from $55.

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