15 Best Stocks to Buy According to Jim Simons’ Renaissance Technologies

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

Renaissance Technologies Q4 Stake: $454.8 million

Number of Hedge Fund Holders: 101

Spotify Technology S.A. (NYSE: SPOT), a leader in digital music streaming, is renowned for revolutionizing the music industry. The company has transformed how music is monetized by compensating artists based on song streams, rather than traditional revenue models that rely on album sales and live performances.

On April 30, Batya Levi and other UBS analysts reiterated their Buy rating for Spotify Technology S.A. (NYSE:SPOT) stock, maintaining a price target of $680. The endorsement follows Spotify’s most recent financial report, which showed that, although revenue growth on a foreign exchange-neutral (FXN) basis slowed to 15% year-over-year, down from 17% in the previous quarter, the company’s subscriber numbers exceeded projections. Additionally, the company’s gross margins increased by about 400 basis points, lower than the 550 basis points in the previous quarter. Despite this, Spotify’s management has reaffirmed its goal of increasing gross margins by 2025, albeit at a more gradual pace with expected fluctuations throughout the year.

In the US, UK, Canada, and Australia, Spotify Technology S.A. (NYSE: SPOT) has also introduced Partner Programs that enable video podcast creators to earn money from their work in various revenue streams. As a result, creator payouts rose by a notable 300% in just one month, while the platform’s video podcast consumption grew by more than 20%.

Baron Focused Growth Fund stated the following regarding Spotify Technology S.A. (NYSE:SPOT) in its Q1 2025 investor letter:

“Spotify Technology S.A. (NYSE:SPOT) is a leading global digital music service offering on-demand audio streaming through paid premium subscriptions and an ad-supported model. Shares were up, once again attributable to another impressive beat in gross margins and a healthy increase in operating margins. Spotify has been on a path to structurally increase gross margins, aided by its high-margin artist promotions marketplace, growing contribution from podcasts, and structural investments in advertising. Users continued to grow at a double-digit pace despite price hikes. Spotify also continued to innovate on the product side, calling 2025 the “year of accelerated execution,” with priorities in improving advertising, expanding into video, developing a Super Premium tier, and taking more market share. We view Spotify as a long-term winner in music streaming with potential to reach 1 billion-plus monthly active users.”

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