We recently compiled a list of the 8 Good Stocks To Buy Right Now. In this article, we are going to take a look at where Spotify Technology S.A. (NYSE:SPOT) stands against the other good stocks to buy right now.
Stocks to Perform Well in 2025
On October 14, Tom Lee, Fundstrat Global Advisors managing partner and head of research, appeared in an interview on CNBC to discuss the latest market trends and share his expectations.
In a previous interview, Lee hinted that a period of market volatility is expected, as 2024 heads for a soft landing. However, in this interview, Lee revealed that he had underestimated the market and that it had been extremely resilient and confident, contrary to what he believed earlier. He adds that this indicates the decreasing importance of macroeconomic data to investors.
Lee also adds that for the past two years, investors have been expecting a recession and have held back. Henceforth, with all this cash on the sidelines, investors have been more than willing to invest. October so far has been a great month for the market, despite CPI data being higher than expectations.
Lee emphasizes the need for the Fed to be more supportive as concerns over the job market rise and the upcoming election draws closer. He suggests that despite the election results he expects stocks to perform well in 2025.
The Fed Should Go Slower, Strategist Says
The market rose to an all-time intraday earlier today and the Fed governor stressed the need for caution amid decreasing interest rates. On October 15, Warren Pies, from 3Fourteen, appeared in an interview on CNBC to discuss his market thesis for the rest of the year.
Pies suggests that rates are the biggest risk to the market at the moment, especially if drastic measures are introduced. He further adds that if the Fed decides to bring the rate down to 3% immediately, the long-term market outlook could be extremely volatile.
He explained that the concern is more about the rate of change and not the absolute level the Fed is trying to achieve. Pies adds that the market still has a lot of room to run before another drastic cut is implemented. He emphasized that the Fed must operate at a pace the market can digest. He also suggested that the market has started to reaccelerate, hinting that a soft landing is more likely.
Now that we have studied the market outlook up until the end of 2024, let’s take a look at some of the good stocks to buy right now.
Our methodology
We used a consensus-based approach and sifted through financial media reports to first compile a list of good stocks to buy right now. We then shortlisted and ranked these stocks by using Insider Monkey’s hedge fund data for the second quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A person wearing headphones listening to an audio streaming service.
Spotify Technology S.A. (NYSE:SPOT)
Number of Hedge Fund Holders: 88
Spotify Technology S.A. (NYSE:SPOT) ranks fifth on our list of good stocks to buy right now. The audio streaming company has grown significantly. It allows people to discover music, listen to podcasts, stay on top of celebrity tours, and optimize listening profiles.
The company is present in 184 countries and has more than 626 million monthly active users, comprising 246 million premium subscribers. The company grew its monthly active users by 14% year-over-year. In the second quarter of 2024, the company logged $3.81 billion in revenue, generating most of it from two major segments, premium and ad-supported users. The two segments made up 88% and 12% of the total revenue, respectively.
The company is known for its algorithm that helps music fanatics discover music that suits them right. To improve and provide premium customer satisfaction, Spotify Technology S.A. (NYSE:SPOT) makes significant investments in research and development. The R&D expense is primarily allocated to products and features that improve the user experience.
Overall, Spotify Technology S.A. (NYSE:SPOT) has a sustainable business model that promises solid revenue growth for the foreseeable future. While competitors are springing up, Spotify has so far sustained a positive brand image, explaining why 88 hedge funds were bullish on the stock at the close of Q2 2024, according to the Insider Monkey database.
Overall SPOT ranks 5th among the 10 good stocks to buy right now. While we acknowledge the potential of SPOT as an investment, our conviction lies in the belief that 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 but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.