11 Best Performing Large Cap Stocks So Far in 2025

Page 6 of 10

5. Spotify Technology S.A. (NYSE:SPOT)

Market Capitalization: $132.056B

Number of Hedge Fund Holders: 101

Year-To-Date Performance: 39.83% 

Spotify Technology S.A. (NYSE:SPOT) is the world’s largest music streaming platform. The company provides a platform that allows users to access, discover, and manage a vast library of over 100 million songs, nearly 7 million podcast titles, and 350,000 audiobooks. The company offers two main tiers including the freemium subscription and the premium account.

On May 2nd, Loop Capital analyst Alan Gould raised the firm’s price target on the stock from $435 to $550, while keeping a Hold rating on the shares. The analyst noted that while the company reported quarterly results reflecting above-expectation subscriptions, however, it missed the guidance on ad-supported revenues.

During the fiscal first quarter of 2025, Spotify Technology S.A. (NYSE:SPOT) grew its monthly active users by 10% year-over-year and premium subscribers by 12%. This took the total revenue up by 15% to reach $4.19 billion. Moreover, the gross profit also improved by 32% during the same time. Management noted that they have launched Partner Programs in the US, the UK, Canada, and Australia, that allow video podcast creators to monetize their content through multiple revenue streams. As a result, the video podcast consumption on the platform has increased by over 20%, and creator payouts have grown by 300% in only a month. Spotify Technology S.A. (NYSE:SPOT) is one of the best-performing large cap stocks so far in 2025.

JDP Capital Management stated the following regarding Spotify Technology S.A. (NYSE:SPOT) in its Q1 2025 investor letter:

“Spotify Technology S.A. (NYSE:SPOT) – Spotify remains our largest position. In the fourth quarter the company’s free cash flow was up 123% over last year resulting from strong operating leverage that the market had not priced in the valuation. Spotify ended 2024 with 675 million subscribers between paid and ad supported. Spotify and YouTube are the primary beneficiaries of the mega trend shift from linear media to podcasting.

One area of disappointment, and an area for possible concern, is the company’s challenges to grow advertising revenue and profitability. Advetising is an important component to the next leg of the company’s profitability inflection and ability to achieve management’s goal of €20 billion in future operating profit. The market has thus far been willing to ignore lagging advertising revenue because of continued growth in paid subscriptions and ability to sustain price hikes. In 2024 advertising only grew 7% representing about 12% of total revenue. Spotify is still struggling with targeting and performance advertising metrics that can compete with other scaled players like YouTube or Instagram. Although not yet alarming to the investment thesis, the lack of advertising revenue growth is something we are watching closely as the economy softens. The stock was up about 20% in the first quarter.”

Page 6 of 10