CoStar Group has launched Homes AI on Homes.com, a conversational search tool powered by Microsoft Azure OpenAI intended to counter AI-driven disruption and pressure from activist investor Third Point LLC. The announcement comes as the company faces significant financial headwinds and a recent analyst downgrade.
- The company reported a $30.9 million GAAP net loss for Q3 2025 compared to a $53 million profit year-over-year, signaling that AI-related expenses are currently outweighing operational gains.
- Wells Fargo recently downgraded the stock to Underweight with a $48 price target, citing skepticism regarding near-term catalysts and notable insider selling.
- Despite reporting 11.6% revenue growth, the stock has faced a sharp decline with a 30% loss over the past 30 days and a 39.4% drop over the last year.