LikeFolio’s Landon Swan said in a recent program on Schwab Network that he likes Spotify Technology (NYSE:SPOT) because of the company’s expansion. He believes the company is dominating Apple Music.
“I mean, it’s clearly the leader. It’s taking over and, you know, it’s doing something a lot of people didn’t think a company like it could do, and it’s beating the big boy at his game, right? Apple Music is just being dominated by Spotify Technology SA (NYSE:SPOT). They just have, you know, they built a better mousetrap, frankly. I mean, their product is just much better. And so, you know, with this run from 340 a year ago to 740 now, they’re demonstrating their dominance through that better software. And what we’re seeing now is a continued expansion of that lead. So right now, Spotify Technology SA (NYSE:SPOT) commands about a 72% mind share, where people are talking about it or using it. That lead is expanding. As you can see here, they’re plus 6% on a year-over-year basis. Now Apple Music is growing as well. Sirius and Pandora are continuing their decline; they’re going to be irrelevant soon. But Spotify Technology SA (NYSE:SPOT) is expanding more. Apple’s still growing, but not as quickly as Spotify. So they’re going to hold on to that 72% lead and continue to expand it.”
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Lakehouse Global Growth Fund stated the following regarding Spotify Technology S.A. (NYSE:SPOT) in its second quarter 2025 investor letter:
“Finally, in third place was Spotify Technology S.A. (NYSE:SPOT), the world’s leading audio streaming platform. It’s a company we’ve long admired for its product leadership, and more recently, for demonstrating an ability to convert that product leadership into solid economics for shareholders. In 2024, Spotify grew revenue by 18% to €15.7 billion, turned a €311 million operating loss to a €1.4 billion operating profit, and more than tripled free cash flow from €678 million to €2.3 billion. The operational performance was impressive, but the share price moved even faster, rising more than fivefold from its November 2022 lows.
As Spotify’s valuation increased, we gradually reduced our exposure over the course of the year as the risk/reward became less attractive. The strong fourth-quarter result, particularly in user and subscriber growth, stretched the valuation even further and ultimately prompted our decision to fully exit. Whilst we generally dislike selling on valuation grounds alone, when things do get stretched well past their norms and to levels where the return profile no longer offers the asymmetric upside that led us to invest in the first place, we won’t hesitate to move on. Hence, we completed our exit earlier this year and redeployed the capital to other ideas with more attractive setups.”
While we acknowledge the risk and potential of SPOT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SPOT and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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