By Pushkala Aripaka
(Reuters) -Rightmove shares plunged as much as 28% on Friday after Britain’s biggest property portal warned of slower profit growth next year as it steps up investments, especially in artificial intelligence.
The stock hit a two-year low of 474.5 pence, and was down 18.8% at 532.6 pence at 0930 GMT, the biggest drop on the blue-chip FTSE-100 index.
“AI is now becoming absolutely central to how we run our business and plan for the future,” CEO Johan Svanstrom said in a statement, adding that the company would accelerate spending between 2026 and 2028 to deliver double-digit growth in profit in the longer term.
PROFIT GROWTH TO SLOW NEXT YEAR
Companies globally are pouring billions of dollars into AI, which has raised concerns of a potential bubble akin to the dot-com era, and investors are on guard for signs that demand is tailing off or whether such spending will deliver anticipated returns.
For 2026, Rightmove expects to invest about 18 million pounds ($24.2 million) in various initiatives, which will restrict underlying operating profit growth to 3% to 5%, slower than the 9% growth at the end of the first half of 2025.
Margins are expected to dip to 67%, below the 70% anticipated previously, analysts said.
While the UK property sector has seen a rebound in buyer interest, inflationary pressures and broader economic uncertainty continue to dampen consumer sentiment ahead of an expected tax-hiking government budget later this month.
Rightmove’s strategy has also come under scrutiny after it rejected multiple takeover bids last year from Rupert Murdoch’s REA Group.
“We want to stress that we see additional investments into consumer innovation, new AI tools and R&D growth as the right step but flag ongoing investor skepticism on those initiatives,” JP Morgan analysts said in a note.
Rightmove said its revenue in 2026 was expected to increase between 8% and 10%, similar to 2025.
($1 = 0.7451 pounds)
(Reporting by Pushkala Aripaka in Bengaluru. Editing by Mrigank Dhaniwala and Mark Potter)
