According to Financial Times News, Rightmove shares plummeted nearly 25% on Friday after the UK property listings site warned that profit growth would slow significantly due to increased artificial intelligence investment. The FTSE 100 company forecast underlying operating profit growth of just 3-5% for next year, a sharp drop from the 4-9% range it had projected for 2024 and 2025. Rightmove specifically cited £18 million in increased investment spending as the primary reason for the profit slowdown. Shares in the property giant fell as much as 22% to 508.4 pence during early trading. CEO Johan Svanstrom declared that AI is “now becoming absolutely central to how we run our business,” while promising that the investment would eventually drive “double-digit” profit growth in the longer term.
The Market’s Verdict
That 25% drop tells you everything you need to know about how investors feel about this pivot. They’re basically saying they don’t believe the long-term payoff justifies the short-term pain. And honestly, who can blame them? We’ve seen this movie before – companies announce massive AI spending, profits take a hit, and shareholders get nervous. But here’s the thing: Rightmove isn’t some struggling startup trying to reinvent itself. They dominate the UK property market. So why such a brutal reaction?
Who Really Feels This?
For property agents using Rightmove, this could actually be good news if the AI investments translate into better leads and more efficient matching. But they’ll probably face higher fees down the line to pay for all this tech. Homebuyers and renters might see smarter property recommendations and better search functionality. The real question is whether £18 million worth of AI can actually move the needle in a market that’s already pretty efficient.
The AI Spending Dilemma
Every company right now is facing the same pressure: spend big on AI or get left behind. But investors want to see immediate returns, not vague promises about “long-term double-digit growth.” Svanstrom’s betting his career that AI will transform property search, but the market’s calling his bluff. It’s a classic case of short-term Wall Street thinking versus long-term strategic vision. The problem? In today’s market, patience is in seriously short supply.
