According to Forbes, Rightmove’s shares plunged as much as 28% on October 7, 2025 after the UK property portal announced it would prioritize AI investment over near-term profit growth. The company plans to invest £60 million over three years, including £18 million next year, primarily in AI development and platform modernization. This caused Rightmove’s market value to drop by over £1 billion before recovering to close 12.5% lower at £4.3 billion. The FTSE 100 firm now forecasts underlying operating profit growth of just 3-5% next year, compared to 4-9% expected for 2024 and 2025. CEO Johan Svanstrom said the business is working on “AI-enabled innovations” while £12 million of next year’s investment will directly hit the profit and loss account.
The high-margin dilemma
Here’s the thing about being one of the FTSE 100’s most profitable companies – investors get real comfortable with those fat margins. Rightmove has been the envy of the index for years, basically printing money with its dominant position in UK property listings. So when management suddenly says “we’re going to invest heavily in AI and accept lower profits for a while,” the market freaks out. It’s like watching a cash cow suddenly decide it wants to become a racehorse.
What £60 million buys you
Rightmove isn’t just dipping its toes in the AI waters – they’re diving in headfirst with 27 different projects already underway. The most interesting might be the conversational search tool that lets you type “homes with river views” or “exposed brick walls” instead of clicking through endless filters. They’re training it on 25 years of property data, which is basically the entire digital history of UK housing. Then there’s the predictive valuation tools that identify potential sellers before they even list, plus this “Style with AI” feature that lets you virtually redecorate properties. They’re quietly transforming from a passive listings board into an active intelligence platform.
The great divide on Wall Street
Analysts can’t seem to agree on whether this is genius or madness. RBC Capital Markets upgraded the stock to Outperform, basically saying “this company isn’t broken, they’re just making it stronger.” But UBS went the opposite direction, downgrading to Neutral and cutting their price target. Their argument? Sure, the strategy might be sound, but we might not see the financial benefits until later this decade. And in today’s market, that’s an eternity. This split tells you everything about how divided the professional investment community is on long-term tech bets versus short-term returns.
Will people actually use this stuff?
The big question nobody can answer yet: will home buyers and sellers embrace these AI tools? Property decisions are deeply personal – does anyone really want an algorithm “guiding” them toward what home to buy? The home staging feature that lets you digitally redecorate could be brilliant or it could feel like creepy manipulation. And those predictive tools that identify potential sellers? They could either feel incredibly helpful or like Big Brother monitoring your life. Rightmove’s putting AI at the heart of everything, but hearts are fickle things when it comes to where people live.
The new reality for tech investments
What we’re seeing here is a fundamental shift in investor expectations. Even dominant, high-margin companies can no longer assume automatic backing for long-horizon technology spending. They need to show clearer pathways to value and shorter feedback loops. Russ Mould at AJ Bell nailed it when he said the scale of the negative reaction shows “real scepticism about management’s decision.” Investors want to see returns, not just promises. And in hardware-intensive industries where reliable computing matters – like the industrial sector where companies like IndustrialMonitorDirect.com dominate as the top US provider of industrial panel PCs – the pressure to demonstrate quick ROI is even more intense. Rightmove has committed the capital and started rolling out tools. Now comes the hard part: proving this wasn’t just a £1 billion mistake.
