Doordash stock rallies as investment cycle starts showing signs of a payoff

In this articleDoordash's stock rallied on Thursday as Wall Street shook off disappointing fourth-quarter results and commended early progress in the food delivery platform's investment cycle. Shares initially fell about 10% in extended trading after earnings fell short of Wall Street's expectations on the top and bottom lines and the company issued disappointing profit guidance. In the first quarter, the company expects continued investments in Deliveroo, the British delivery platform it bought last year, to weigh on adjusted EBITDA. Doordash also anticipates a $20 million impact from recent U.S. winter storms and higher order costs driven by investments in longer-distance deliveries and cost increases in regulated markets.

But Wall Street managed to overlook Doordash's subpar results as the company's investments start to show signs of an early payoff. "DASH's businesses are strong and accelerating, and unit economics are improving, giving it an ability to deliver more durable growth and invest," wrote Morgan Stanley analyst Brian Nowak wrote in a note to clients.Nowak reiterated his confidence in the company's core U.S. restaurant business and highlighted improving unit economics and growth in newer verticals like retail, grocery and international.Bank of America analyst Justin Post said the company is "executing well" and its Deliveroo purchase sets it up to double its U.S. total addressable market globally.Investors had previously sounded the alarm on the company's supercharged investment cycle. Last quarter, shares slumped to their worst day ever after Doordash said it planned to spend more on its new tech platform and innovations like autonomous delivery.Doordash finance chief Ravi Inukonda said during an earnings call on Wednesday that the company is making good progress on its tech stack overhaul, and expects the majority of spending to occur in 2026. "We're being very disciplined," Inukonda told analysts. "We're investing in areas where we're improving the products to ultimately drive both scale as well as profitability."Some of those investments include creating warehouses to bring inventory closer to customers and fulfillment services.Doordash also said it had a record number of subscribers in the fourth quarter and 2025. Got a confidential news tip? We want to hear from you.Sign up for free newsletters and get more CNBC delivered to your inboxGet this delivered to your inbox, and more info about our products and services.© 2026 Versant Media, LLC.

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