Rightmove just wiped £1bn off its market value in a single morning. The culprit? A hefty £60m AI spending spree that’s got investors running for the hills.
The UK’s biggest property platform announced plans to go all-in on artificial intelligence over the next three years, partnering with Google Cloud to integrate advanced AI tools across its entire operation. But rather than celebrating the innovation, the market threw a tantrum. Shares nosedived as the FTSE 100 firm slashed its short-term profit targets to fund the AI push.
It’s the latest sign that Wall Street’s love affair with AI might be cooling off.
Why Rightmove’s AI Bet Rattled Investors
CEO Johan Svanstrom stated: “AI is now becoming absolutely central to how we run our business and plan for the future.”
The company’s struck a multi-year deal with Google Cloud, bringing Gemini and Vertex AI into the Rightmove platform. Sounds exciting, right? Well, not to investors watching their profit margins shrink.
The problem? Rightmove warned that profit growth in 2026 would slow significantly as it pumps millions into AI development. And markets hate uncertainty, especially when it comes with a price tag this hefty.
“The market did not like Rightmove’s latest update one bit,” said AJ Bell’s Russ Mould. “Investing for future growth isn’t a bad thing, but the scale of the negative reaction implies real scepticism about putting so much money into AI.”
Still, Rightmove’s holding firm on its 2025 targets—aiming for roughly 9% revenue growth and a 70% operating margin. That’s solid, but apparently not solid enough to calm nervous shareholders.
The Growing AI Bubble Fears
Rightmove’s share price crash didn’t happen in a vacuum. Global markets are getting jittery about AI valuations, and some heavyweight voices are sounding the alarm.
Bank of England Warns of Possible AI Bubble
Following Thursday’s interest rate decision, Bank of England Governor Andrew Bailey dropped an ominous warning about AI stock prices. The Bank’s watching “very carefully” for signs of overvaluation.
“It is perfectly possible that AI could be the next big mover in terms of productivity,” Bailey said. “The market could overprice the returns, but the returns could still be substantial.”
Translation? AI might deliver real gains, but we could see a nasty correction first if things get too frothy.
‘Big Short’ Investor Bets Against AI Giants
Michael Burry—the hedge fund legend who predicted the 2008 financial crisis—just took a $1.1bn short position against AI heavyweights Nvidia and Palantir.
That’s right. The guy who made a fortune betting against the housing bubble is now wagering that AI stocks will tumble. He’s drawing parallels between today’s AI boom and the dot-com crash of 2000, and that’s got tech investors sweating.
When someone with Burry’s track record puts a billion dollars on the line, people pay attention.
What This Means for Property Tech
Rightmove’s AI gamble raises a bigger question: Is property tech ready for this level of investment, or are companies getting swept up in hype?
On paper, AI makes perfect sense for property platforms. Better search algorithms, personalised recommendations, predictive pricing models—these tools could genuinely transform how people buy and sell homes.
But here’s the catch: AI development is expensive, returns are uncertain, and investors want to see profits now, not promises of future dominance.
Rightmove’s betting that going big on AI will future-proof its business. The market’s betting it won’t pay off fast enough. Time will tell who’s right.
The Bottom Line
Rightmove’s £60m AI investment just cost it £1bn in market value, a brutal reminder that innovation doesn’t always win applause from shareholders. With AI bubble fears spreading from the Bank of England to legendary short-sellers, tech companies face a tough question: invest big and risk the backlash, or play it safe and risk falling behind?
For now, Rightmove’s sticking to its guns. Whether that confidence pays off or becomes another cautionary tale depends on whether AI delivers the goods—or becomes the next dot-com disaster.
Want to stay ahead of property and tech market shifts? Keep an eye on our finance and economics coverage for the latest insights.
FAQ
Q1: Why did Rightmove shares crash?
A: Rightmove announced a £60m AI investment plan over three years, which slashed short-term profit growth targets. Investors reacted negatively to the reduced profitability outlook, wiping £1bn off the company’s market value.
Q2: What AI technology is Rightmove using?
A: Rightmove has partnered with Google Cloud in a multi-year deal to integrate AI tools including Gemini and Vertex AI across its entire platform. The investment aims to enhance search, recommendations, and user experience.
Q3: Is there really an AI bubble forming?
A: Bank of England Governor Andrew Bailey warned markets might be overpricing AI returns, while investor Michael Burry has taken a $1.1bn short position against major AI companies. Many analysts are drawing comparisons to the 2000 dot-com bubble.
Q4: Will Rightmove’s AI investment pay off?
A: It’s too early to say. While AI could transform property search and drive long-term growth, the market is sceptical about near-term returns given the massive investment required and uncertainty around profitability.
Q5: What are Rightmove’s 2025 targets?
A: Despite the AI investment, Rightmove has reaffirmed its 2025 targets of approximately 9% revenue growth and a 70% operating margin. The slower profit growth warning applies specifically to 2026.
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