From time to time, the so-called Okado (LSE: OCDO) share price is impressive. It comes to life like a leftover New Year’s Eve diamond and gives patient investors a glimmer of hope.

It performed well over the summer, reaching almost 396p on August 8 after brokerage JPMorgan Cazenove surprised markets by maintaining its Overweight rating and raising its price target from 400p to 437p.

Chance of loss

I remember those heady days well. I bought Ocado shares in 2023 after they were already down 85% from their all-time high, thinking they had dropped enough to be considered a bargain. I was wrong. Within a few months I had lost half of my stake, although over a few still summer days I somehow managed to get back to level-setting.

Then the fun was over. The lights went out and I went back to feeling 50% lost. I shouldn’t complain. Long term holders FTSE250 shares fell over 90%.

Shares fell behind key US partner Hooks has confirmed that it will close three Ocado automated customer service centers (CFCs) in November. This decision will reduce Ocado’s full-year 2026 revenues by approximately £38 million.

Kroger will continue to operate large-scale centers in Ohio, Texas, Georgia, Colorado and Michigan. However, the original plan assumed 20 people.

CEO Tim Steiner has spent billions developing robotic warehouse technology and is dependent on licensing it to supermarkets around the world. No one doubts that the technology is great. The real question has always been cost and demand.

Ocado shares fell to 2023 levels before seeing a respite on December 5 when Kroger agreed to pay $350 million in damages. Helpful, but not the same as long-term utilize.

Another risk is that artificial intelligence (AI) could offer cheaper and simpler ways to automate grocery deliveries, potentially undercutting Ocado’s costly systems.

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Now suddenly the glow was back. Ocado shares rose 20% last week, cutting my loss to about 40%. Happy days! What’s going on?

This reflection has nothing to do with robotics. Instead, it is powered by smaller British online grocery joint venture Ocado Marx and Spencer. This side of the business is doing better.

The latest Worldpanel data showed Ocado sales rose 15.8% in the 12 weeks to November 30, well ahead of second placed Lidl with 10.2% and massive gun Tesco at 4.7%. This raised Ocado’s market share to 2.2%. This is still a tiny thing considering Tesco’s dominance of 28.3%, but it is progress nonetheless.

The venture brings losses, but it sustains hope. Given that Ocado’s market capitalization has fallen below £2 billion, it may be worth buying shares for the food venture alone. The problem is that the technology department continues to consume huge sums of money and may never deliver a return.

I’m holding my shares. The mood is so gloomy that even tiny positive news can trigger a massive spike, as we just saw. Who knows, if Ocado has a great Christmas, we may see more sparkles in 2026.

I’m grateful for the respite, but I wouldn’t advise fresh investors to consider Ocado today. It’s still too risky.