Rightmove Shares Plunge Up to 28% on AI Spending, Profit Outlook Cut

Rightmove’s Shares Tumble Amid Large-Scale AI Investment

British property portal Rightmove saw its shares plunge as much as 28% on Friday following a downshift in its 2026 operating profit forecast driven by increased expenditure on artificial intelligence (AI) initiatives. The stock subsequently recovered some ground, closing around 13% lower and hitting a 52-week low, reflecting investor unease over the firm’s strategic pivot and its short-term profitability outlook.¹²

Profit Growth Tempered by Strategic AI Commitments

Rightmove updated investors to expect operating profit growth between 3% and 5% in 2026, a significant downward revision from the 9% forecast earlier this year. While the company maintains its revenue growth target of approximately 9% for 2025 and a range of 8% to 10% for 2026, the decline in profit growth is attributed to around £18 million being funneled into AI developments. These investments are focused on upgrading internal systems, enhancing consumer-facing search apps, and exploring novel AI applications including digital agents to reshape the UK property market ecosystem.²⁴

UBS analysts described the pivot as a “strategic challenge” that leaves unanswered questions for the market, leading them to place Rightmove’s price target and rating under review. Their research predicts a potential downgrade of 5-19% in Rightmove’s fiscal 2028 operating profit relative to consensus estimates, reinforcing market skepticism about the timing and scale of AI-driven returns.¹

Market and Economic Context: Navigating the AI Investment Cycle

Rightmove’s announcement occurs amid broader market concerns about an overheated AI investment bubble. U.S. technology shares have recently extended losses, dragging down Asian and European markets before some partial recovery. Multi-asset strategist Kiran Ganesh of UBS noted the unusually smooth rally in tech despite uncertainties regarding future cash flows and valuation risks, underscoring investor caution in this high-stakes innovation cycle.¹

From a macroeconomic perspective, residential property markets in the UK remain in a complex state. According to Rightmove’s trading update, sales agreed for 2025 to date rose 4% year-over-year, while property listings remain at decade-high levels, surpassing last year by 3%. National house prices have broadly stagnated due to increased supply and lingering budget uncertainties, with rental prices continuing to grow but at a slower pace. Demand for listed properties shows resilience, with enquiry rates above pre-pandemic averages despite recent moderation.¹ Such dynamics reflect the broader UK housing market’s sensitivity to economic conditions like interest rate policies, currently influenced by the Bank of England’s monetary stance aiming to balance inflation control and market stability.

Data from the Office of National Statistics (ONS) shows UK house price inflation has recently hovered near zero amid these pressures, emphasizing the importance of digital platforms like Rightmove in facilitating efficient market transactions during uncertain times.

Rightmove’s Long-Term AI Vision

Despite short-term profit pressures, Rightmove remains confident that AI investments will fuel sustainable growth in the coming years. CEO Johan Svanstrom emphasized that AI is “absolutely central” to the company’s future strategy, highlighting ongoing developments aimed at leveraging their extensive customer reach and connected data assets. The company projects annual operating profit increases of around 12% by 2030, with expected revenue growth surpassing 10% annually and earnings per share growth above 15% per year in that timeframe.²⁴

This long-term view aligns with typical technology adoption S-curves where initial capital outlays delay profitability before driving higher-margin earnings and competitive advantage.

Implications for Investors and the Property Sector

Rightmove’s recalibrated guidance and market reaction underline the risks and rewards inherent in integrating emerging technologies into legacy business models, particularly in sectors like real estate where digital transformation is accelerating. Investors will be closely monitoring execution on AI initiatives and the eventual return on investment, especially as regulatory scrutiny around digital markets and AI applications is intensifying both in the UK and the European Union.

For industry stakeholders, Rightmove’s move signals a shift toward deeper technology integration, potentially reshaping property search, valuation, and transaction processes. As of late 2025, the UK property market is navigating a cautious recovery phase, and digital platforms play an increasingly critical role in transparency and efficiency.

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• Key figures: Rightmove expects a 3-5% operating profit growth in 2026, down from an anticipated 9% earlier; plans for £18 million AI investments.
• Real estate trend: 4% increase in 2025’s sales agreed, listings at a decade high, national house prices stable.
• Market context: Tech shares broadly fall amid AI bubble fears; broader economic uncertainty in house prices and rental growth.