Audio Streaming Fuels Investor's Optimism About Spotify

Spotify Technology S.A. (NYSE: SPOT) reached a new stock price high of $785.00 on Friday, June 27, 2025, briefly valuing the company at nearly $161 billion. 

The stock closed at $772.60, reflecting a 9.2% weekly gain. This surge was driven by bullish analyst upgrades, with UBS raising its price target to $895 from $680 and maintaining a "Buy" rating, citing Spotify’s expansion into audiobooks and other non-music content as key growth drivers. 

Guggenheim also increased its price target to $840 from $725, based on a discounted cash flow analysis, while BofA Securities raised its target to $900 from $700, expressing confidence in Spotify’s core fundamentals despite a slightly lowered Q2 revenue forecast of €4.25 billion due to currency headwinds.

Spotify’s strong performance is underpinned by robust subscriber growth, with 268 million premium subscribers in Q1 2025, up 12% year-over-year, and total revenue of €4.2 billion, a 15% increase on a constant currency basis. 

The company’s market capitalization has grown significantly, with a 73% year-to-date stock increase and a five-year return of over 204%. Analysts highlight Spotify’s pricing power, advertising expansion, and potential to reach 1 billion monthly active users by 2030 as factors supporting its valuation. 

However, some caution persists, with GuruFocus estimating a fair value of $276.48, suggesting the stock may be overvalued at its current price, trading at a high P/E ratio of 112.29. Despite mixed earnings results, with Q1 EPS of $1.13 missing expectations, Spotify’s revenue growth and market dominance in audio streaming continue to fuel investor optimism.