Rightmove, a property listing website, recently announced plans to increase its investment in artificial intelligence (AI), which has led to a significant decline in its share price. The company has adjusted its profit growth forecasts for the upcoming year to account for the expected expenses related to this investment, among other initiatives aimed at enhancing financial returns.
Johan Svanstrom, Rightmove’s chief executive, emphasized the importance of AI in the company’s future operations, stating that it is becoming integral to their business strategy. Rightmove plans to allocate £60 million toward AI development over the next three years, aiming to enhance its services for partners and consumers. The company is targeting an annual revenue growth rate exceeding 10% by 2030.
However, Rightmove’s projections indicate a more modest operating profit growth of 3% to 5% for 2026, a decrease from the 9% growth anticipated for this year. The firm is optimistic that the effects of its AI investment will lead to a rebound in operating profits after 2028.
Despite these ambitious plans, investor reaction has been predominantly negative, with shares dropping by as much as 28% during early trading on Friday, although there was a slight recovery later, resulting in a 13% decline. Some analysts express skepticism regarding the scale of the investment in AI, suggesting that while there are potential benefits in terms of efficiency and user experience, the market appears wary of the company’s decision to commit significant funds to this initiative.
The overall context of the market reaction raises questions about investor confidence in Rightmove’s strategy and the feasibility of AI’s integration into its business models.
Source: https://www.bbc.com/news/articles/cly97lj0nddo?at_medium=RSS&at_campaign=rss