Shares in property listing website Rightmove have fallen sharply after it revealed plans to increase investment in artificial intelligence (AI).
Rightmove has cut its profit growth forecasts for next year to reflect plans to increase investment in artificial intelligence, as well as other changes aimed at boosting profits.
The company's CEO Johan Svanström said artificial intelligence is “becoming absolutely central” to business management and plans for the future.
But investors were less enthusiastic and Rightmove shares fell by more than a quarter at one point on Friday.
Rightmove has announced plans to invest £60 million over the next three years, with the majority of this investment focusing on artificial intelligence.
“We are already working on a wide range of exciting AI-powered innovations for the benefit of our partners and consumers,” said Mr. Svanstrom.
The company said it aims to increase annual revenue growth to more than 10% by 2030.
However, the company also forecast operating profit growth of 3% to 5% in 2026, lower than its forecast for 9% growth this year.
Rightmove plans to recoup its investment in artificial intelligence in the next three years and expects operating profits to recover after 2028.
Mr Svanström said he was confident the investment “will create an even stronger platform and faster-growing business over time”.
But the company's shares fell as much as 28% in early trading on Friday, although they later recovered slightly to fall 12.5% by the close of trading.
“Investing in future growth is not a bad thing, but the scale of the market's negative reaction implies real skepticism about its decision to pour so much money into AI,” said Russ Mold, investment director at AJ Bell.
“We can see how AI can help Rightmove operate more efficiently, make better use of growing amounts of data and improve the user experience on the site,” he added.
“However, there is clear concern that Rightmove is jumping on the bandwagon and increasing its spending on AI.”
