Is Spotify (SPOT) the Best Communication Services Stock According to Hedge Funds?

Spotify Technology (NYSE:SPOT) is one of the best communication services stocks according to Hedge Funds.

On December 19, Bank of America Securities analyst Jessica Reif Ehrlich reaffirmed her outlook on Spotify Technology (NYSE:SPOT). Ehrlich rated the stock as Buy with a target price of $900. As per the analyst’s estimates, the stock offered 58% upside potential from the prevailing level.

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Ehrlich has predicted “continued momentum across KPIs” for the fourth quarter, following almost 12% topline growth in the previous 12 months. She mentioned successful price hikes being implemented in several markets without significant user churn. This shifts investor focus towards potential price hikes within the U.S. market.

Deutsche Bank also reiterated its bullish view on Spotify Technology (NYSE:SPOT), assigning a Buy rating on December 1. The firm set a price target at $775, which results in an upside of 36%. The firm also predicts strong profitability growth that could come from raising subscription prices. They quantified a $1 increase in monthly subscription fees to have a 2% incremental impact on the 2026 topline, along with a 5% jump in operating earnings.

Spotify Technology (NYSE:SPOT) provides a subscription-based audio streaming service to a worldwide audience. Through its two segments, i.e., Premium and Ad-Supported, the company offers its users access to its catalog of music and podcasts. The company leverages AI capabilities and content licensing to deliver a highly personalized, real-time experience to its users.

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.