Rightmove Stock Nosedives as AI Investment Drags Profit Growth—Traders Hit Panic Button
Rightmove just gave investors a nasty surprise—slamming the brakes on profit forecasts as it doubles down on AI spending. The property portal's shares tanked in early trading, wiping out gains as analysts scramble to adjust targets.
AI gold rush comes at a cost
While rivals chase generative AI hype, Rightmove's aggressive tech investment is biting into margins. The market isn't waiting to see if those shiny algorithms pay off—punishing the stock with sell orders.
Short-term pain for long-term gain?
CEO insists this is 'necessary infrastructure spend,' but City traders clearly think it smells like desperation. One fund manager quipped: 'Nothing boosts shareholder value like an expensive science project.'
The property platform now faces its toughest test—proving AI can actually move the needle before impatient investors move their money elsewhere.
Rightmove’s share drop set a new yearly low
The firm says the difference is almost completely down to how much it is putting into new systems, much of it linked to artificial intelligence. Rightmove is reworking the tools that estate agents pay to use and reshaping parts of the main consumer app and website. The firm is also looking at tools that could help agents work faster or respond to buyers more quickly.
The sharp share slide set a new yearly low for Rightmove, though the losses later eased when some bargain hunters stepped in. Several analysts tried to calm nerves, though it did not fully land.
UBS said the scale of the shift has raised questions that the market cannot yet answer. The bank cut its rating and its price target on the stock while it waits for more details. In a note to clients, the bank said the guidance could trim forecasts for operating profit in 2028 by anything between 5% and 19% based on what analysts had pencilled in.
All of this is happening in a wider environment in which investors are starting to ask themselves if everyone has become too carried away with the AI story. US technology shares had already been sliding the day before.
Markets in Asia and Europe followed the mood during their sessions before later recovering some of those losses.
UBS strategist Kiran Ganesh told CNBC that investors had enjoyed a smooth rally in AI-related shares even though there is no clear way of knowing how big the returns will be and how long it will take before the spending turns into real money.
In other words, there is a risk that everyone got caught up in the moment. The Rightmove news then arrived at a time when nerves were already a little stretched.
Rightmove insists the spending is the correct call. The firm expects operating profit to bounce back after 2028 and is targeting yearly increases of about 12% by 2030 once the heavy building work is done.
The chief executive, Johan Svanstrom, said the company is rethinking nearly every aspect of how it works. He said artificial intelligence now sits at the centre of how the business plans for the future.
“AI is now becoming absolutely central to how we run our business and plan for the future.” Svanstrom.
“We are already working on a wide range of exciting AI-enabled innovations to benefit our partners and consumers, and see vast potential in utilising our leading reach and connected data,” added Svanstrom in an update.
He also said the company is confident that the upgrades will create a stronger digital platform over time.
The City will debate that for a while. In the meantime, the market reaction shows how fragile sentiment is whenever a firm links a slowdown to artificial intelligence spending. There is still faith in the tech theme, but there is also a sense that the easy money phase has passed and companies are now being asked to prove real outcomes rather than simply talk about potential.
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