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Special Report Instacart's Pricing Tests Spark Backlash... But Investors Didn't CareBy Jordan Chussler. Article Published: 12/22/2025. 
What You Need to Know - Instacart’s AI-enabled price tests drew backlash and regulatory attention, but the company says the tests weren’t based on personal data.
- The FTC’s $60 million settlement is a significant blow to Instacart's trust, yet it doesn’t directly alter Instacart’s core demand drivers or unit economics.
- After a brief pullback, the stock rallied to within reach of where it was before the news broke as investors shook off the news and focused on the future.
America's favorite grocery ordering and delivery app came under pressure earlier this month after a consumer advocacy investigation raised concerns about its pricing practices and transparency. A joint investigation conducted by Consumer Reports and Groundwork Collaborative and published on Dec. 9 found that Maplebear (NASDAQ: CART), which operates as Instacart, ran pricing experiments that resulted in different customers seeing different prices for identical items — a practice the report said raised concerns about AI-enabled, targeted pricing. Amazon has quietly poured $144 million into a secretive AI chip company, and committed to buying a staggering $650 million of their product. Why? Because this obscure startup holds the key to unleashing the full potential of Nvidia's revolutionary Blackwell chip. Discover the company at the heart of the AI arms race. The scrutiny came just days before the U.S. Federal Trade Commission (FTC) announced on Dec. 18 that it was levying a $60 million penalty against the company as a result of "deceiving consumers with false advertising, failure to provide refunds and unlawful subscription enrollment processes" in an unrelated enforcement action. This year the stock has underperformed the market, as has much of the consumer staples sector. But since its year-to-date low on Nov. 6, Instacart is up more than 31%. When news of the Consumer Reports investigation broke earlier this month, the stock pulled back nearly 6%. In the days that followed, however, shares had already recovered roughly the same amount. Here's why investors largely shrugged off the controversy around Instacart's pricing experiments and why the FTC penalty hasn't significantly altered shareholders' long-term expectations. How Instacart's Pricing Tests Created Price Differences The largest online grocery ordering and delivery app, Instacart serves roughly 14.9 million customers—up from 14.4 million in 2024—while employing about 600,000 shoppers. Like other companies leveraging AI for competitive advantage, Instacart has used short-term, randomized A/B pricing tests to evaluate aggregate consumer price sensitivity. The AI model, implemented as early as 2022, supported short-term pricing experiments rather than real-time, demand-based dynamic pricing. Consumer Reports found that "many U.S. shoppers who order grocery deliveries through Instacart are unknowingly part of widespread AI-enabled experiments that price identical products differently from one customer to the next." The report said those prices could differ by as much as 23% per item between customers — a technique the company reportedly calls "smart rounding," according to an inadvertently released email. To some insiders and investors, however, the strategy was not entirely secret. Consumer Reports noted that Instacart had disclosed its pricing experiments in corporate marketing and investor materials, even while shoppers were unaware they were participating. Instacart says its retail partners ultimately control base prices on the platform, while Instacart provides the infrastructure used to run pricing tests. Why Investors Shrugged off the Bad News In response to the Consumer Reports investigation, Instacart denied using surveillance pricing, saying it does not use — and does not allow partners to use — personal, demographic, or user-level behavioral data to set prices. Charging different prices for products across customers is not inherently illegal, nor is it new in the U.S. The line between dynamic pricing and what critics call surveillance pricing can be blurred, but many companies routinely adjust prices based on demand, location and other factors. For example, rideshare companies like Uber (NYSE: UBER) and Lyft (NASDAQ: LYFT) use dynamic — or surge — pricing during periods of high demand, adjusting fares for supply, demand, traffic, time of day, location and weather. Investors also consider Instacart's financials. The company was profitable prior to its Sept. 19, 2023 IPO and has averaged 10.15% revenue growth over the last four quarters. At the same time, net cash from operating activities increased by nearly 88%. From an earnings perspective, Instacart has beaten expectations in seven of the past eight quarters and has missed revenue expectations only twice in that span. Wall Street Remains Bullish on CART Industry consultant Grand View Research estimates the global online grocery market was worth more than $67 billion in 2024 and is forecast to grow at a compound annual growth rate (CAGR) of 36.8% from 2025 to 2033. That growth would bring the market to an expected value exceeding $992 billion by the end of the forecast period — a market in which Instacart occupies a central role. The result: a generally bullish view from Wall Street. The 27 analysts covering CART give it a consensus Moderate Buy rating, with an average 12-month price target nearly 14% above current levels. Institutional ownership stands above 63%, with institutional inflows of $3.73 billion into Instacart over the past 12 months versus $1.4 billion in outflows. And while short interest is 6.58% of the float — about $537 million — that figure is down roughly 29% from the prior period, when it was $734 million.
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