Copyright indiatimes
DoorDash shares dropped nearly 9% in premarket trading on Thursday as the company's aggressive plan to invest several hundred million dollars more in 2026 in the face of cost pressures unnerved investors. The San Francisco-based company also missed Wall Street estimates for third-quarter profit due to rising expenses. DoorDash has ramped up investments on partnerships - including with Domino's Pizza, retailer Kroger and robotics firm Serve Robotics - as it broadens its last-mile delivery offerings to reach a wider customer base. J.P.Morgan analysts said the sell-off in the shares was due to its investment plan. "Incremental investments create near-term margin pressure," the analysts said. The company, whose shares have gained about 42% so far this year, said total costs and expenses for the third quarter rose about 23% to $3.19 billion from a year ago. These partnerships, however, helped the company beat quarterly revenue estimates and forecast fourth-quarter gross merchandise value above Wall Street expectations. However, some analysts pointed that the additional investments should not come as a 'surprise', given the company's history of aggressive investing and delivering returns. "We don't view these investments to come as a change in investment philosophy as DoorDash is taking the profit pool in its core US restaurant business and Deliveroo and re-investing in growth," Morgan Stanley noted. Earlier this year, DoorDash acquired British rival Deliveroo in a $3.9 billion deal.
