According to CNBC, UK real estate listing giant Rightmove saw its stock plunge as much as 28% on Friday after warning that accelerated artificial intelligence investments would significantly impact 2026 profits. The company now projects operating profit growth of just 3% to 5% in 2026, a sharp drop from the 9% growth it expects this year. Rightmove attributed the shrinking margins to major upgrades of internal systems, consumer-facing apps, and search tools powered by AI technology. The stock hit a new 52-week low during the selloff, though it later recovered somewhat to trade about 12% lower. UBS analysts immediately moved Rightmove’s price target and rating to “under review,” noting the strategic pivot raises important questions the market can’t yet answer.
The AI Investment Reality Check
Here’s the thing about AI investments that every company is learning the hard way: they’re expensive as hell and the payoff isn’t immediate. Rightmove is basically telling investors, “We’re spending big on AI now, so don’t expect the same profit growth for a couple years.” And the market absolutely hated that message. But is this really surprising? We’ve seen this movie before with companies pivoting to new technologies. The transition period always hurts.
Long-Term Vision vs Short-Term Pain
Now, the big question is whether this is smart long-term thinking or just another case of AI FOMO. Rightmove isn’t just upgrading existing tools—they’re exploring entirely new applications like AI agents. That suggests they’re thinking about fundamentally changing how property searches work. But investors clearly aren’t convinced the payoff will be worth the profit hit. I mean, a drop from 9% to 3-5% growth? That’s massive. The company’s betting that AI will give them such a competitive edge that it justifies the short-term pain. We’ll see if that gamble pays off.
A Broader Tech Lesson
This Rightmove situation feels like a microcosm of what’s happening across the tech landscape. Everyone’s rushing to implement AI, but nobody really knows what the ROI will look like. And when you’re a publicly traded company, you can’t just say “trust us” and expect investors to stick around. They want to see the numbers. Rightmove’s experience shows that even necessary technological upgrades come with serious financial consequences. The company that dominates UK property listings is essentially admitting that standing still isn’t an option—even if moving forward means taking a massive stock hit.
