DoorDash Stock Surges 14% After CEO Defends 'Massive' Investment Plan

From 10% Plunge to 14% Surge in Hours

DoorDash shares whipsawed Wednesday evening, plunging 10% after disappointing earnings, then surging 14% in extended trading. What changed investors' minds in a matter of hours?

The numbers weren't terrible. Revenue jumped 38% to $3.96 billion, total orders grew 32% to 903 million, and the company posted solid profit growth. But missing revenue expectations by $30 million was enough to trigger the initial selloff.

The real drama unfolded during the analyst call, where CEO Tony Xu doubled down on the company's controversial spending plans that have spooked investors for months.

The 'Several Hundred Million' Question

Investors aren't just worried about one bad quarter—they're concerned about DoorDash's appetite for massive investments. The company plans to spend "several hundred million dollars" on global platform integration and autonomous delivery initiatives.

Xu defended the strategy by outlining plans to merge DoorDash, Deliveroo, and Wolt into a single platform—what he called a "massive and expensive undertaking." He could have taken shortcuts, he said, but warned that "could lead to disastrous results for customers."

Winners and Losers in the Same Story

The market's split reaction reveals a deeper divide among investors. Growth-focused shareholders applauded Xu's long-term vision, while profit-conscious investors balked at the spending spree. First-quarter guidance of $675-775 million in adjusted EBITDA fell short of the $802 million consensus.

One bright spot: Deliveroo, the British delivery platform DoorDash acquired, is "growing much faster at the same profit" levels, according to Xu. The integration benefits are starting to show.

The Amazon Playbook or Fool's Gold?

Xu's strategy echoes Amazon's early days—sacrifice short-term profits for long-term dominance. But delivery platforms face different challenges than e-commerce giants. Customer loyalty is fickle, competition is fierce, and regulatory scrutiny is intensifying.

DoorDash shares have already fallen more than 20% this year, reflecting investor fatigue with growth-at-any-cost strategies. The company's ability to execute its ambitious integration plans will determine whether this spending spree creates lasting value or just burns cash.

The Delivery Wars Heat Up

DoorDash isn't alone in this dilemma. Competitors like Uber Eats and regional players worldwide face similar pressure to invest in AI and automation while maintaining profitability. The winners will likely be those who can successfully balance growth investments with operational efficiency.

The market's volatile reaction suggests investors are still deciding whether to trust Xu's vision or demand immediate returns.