Rightmove Shares Plunge as AI Spending Plans Expected to Slow Profit Growth

Shares of Rightmove, the UK’s largest online property platform, tumbled on Friday after the company warned that increased investment in artificial intelligence and digital tools will weigh on profit growth next year. The announcement sent the stock down as much as 28 percent, marking its steepest single-day drop in years and erasing billions in market value.

Rightmove said it plans to boost spending in 2026 to accelerate the rollout of new AI-driven features designed to enhance property search, pricing insights, and advertising efficiency for estate agents and homebuyers. While executives framed the strategy as essential for maintaining the company’s long-term leadership in the online housing market, investors reacted sharply to the near-term earnings impact.

“The additional investment we are making, particularly in artificial intelligence, will strengthen our platform and create new opportunities for both agents and consumers,” Chief Executive Officer Johan Svanstrom said in a statement. “However, these initiatives mean our operating margin will be lower in 2026 as we prioritize innovation and growth.”

The company’s update came alongside its latest trading statement, which showed steady user engagement but slowing revenue growth as the UK housing market continues to adjust to higher borrowing costs. While listings activity has stabilized in recent months, property transactions remain below pre-pandemic levels, and agent spending on advertising packages has become more cautious.

Analysts said investors’ reaction reflected concerns that Rightmove’s ambitious spending plans could pressure short-term profitability without a clear timeline for returns. “Rightmove is trying to future-proof its business, but the market is skeptical about how quickly AI investments will translate into meaningful revenue gains,” said a London-based equities strategist. “The property market itself remains fragile, and that compounds the uncertainty.”

Rightmove has long dominated the UK’s property listings sector, holding a commanding market share against rivals Zoopla and OnTheMarket. However, growing competition and rapid advances in AI technology have prompted the company to accelerate its digital transformation strategy.

The planned AI investments include predictive analytics tools to improve property pricing accuracy, recommendation algorithms for buyers, and smarter advertising solutions for agents. The company is also expanding its data capabilities to help professionals make more informed decisions in real time.

Some analysts, however, see the pullback in Rightmove shares as an overreaction. “The company remains highly profitable with strong cash generation and an unrivaled brand,” said a market analyst at Barclays. “Short-term pressure on margins shouldn’t overshadow the longer-term potential of AI to enhance customer experience and sustain growth.”

Despite the market sell-off, Rightmove reaffirmed its commitment to shareholder returns, including dividends and share buybacks, noting that its financial position remains strong. The company emphasized that it expects profitability to recover after the investment cycle peaks in 2026.

The wider UK property sector has also faced headwinds from slower housing demand and subdued mortgage approvals. Analysts said that while Rightmove’s digital strategy could position it well for the next market upswing, execution risks remain high.

As trading closed in London, Rightmove’s shares were down nearly 26 percent, their lowest level in more than two years. Investors are now watching for further details on the company’s AI roadmap and cost guidance in the months ahead, as the firm seeks to convince markets that its bold technology push will deliver sustainable returns.