With an upside potential of 33.63% as of May 3, Spotify Technology S.A. (NYSE:SPOT) is included among the 10 Best Fortune 500 Stocks to Buy According to Analysts.
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Spotify Technology S.A. (NYSE:SPOT) is the world’s most popular audio streaming subscription service with 751 million users, including 290 million subscribers, in 184 markets.
On April 30, UBS analyst Batya Levi lowered the firm’s price target on Spotify Technology S.A. (NYSE:SPOT) from $760 to $735, but maintained a ‘Buy’ rating on the shares. The reduced target still reflects an upside potential of more than 66% from the current price levels.
The target cut comes despite Spotify Technology S.A. (NYSE:SPOT) reporting better-than-expected results for its Q1 on April 28, topping expectations in both revenue and earnings. The company posted a record operating income of €715 million during the quarter, beating estimates of € 681.6 million, driven by the lower payroll taxes.
However, Spotify Technology S.A. (NYSE:SPOT) came under pressure after the company’s Q1 report was overshadowed by its disappointing outlook for premium subscriber growth for the second quarter. The company expects premium subscribers to increase to 299 million in Q2, falling short of estimates of 302 million.
Baron Capital, an investment management company, stated the following regarding Spotify Technology S.A. (NYSE:SPOT) in its Q1 2026 investor letter:
“Global digital music streaming platform Spotify Technology S.A. (NYSE:SPOT) declined by 16.6% in the first quarter and detracted 72 bps from performance as investors were concerned about the impact AI music could have on the conversion of free subscribers to paying subscribers as well as how it could impact time on the platform. In addition, further concerns about the timing of price increases and resulting margin expansion also frustrated investors. However, the company continues to institute price increases across multiple regions and complete negotiations with major record labels. User growth remains strong, growing at a double-digit rate with high engagement and low churn even with price increases. The company remains on a path to increase gross margins through its high-margin artist promotions marketplace, growing podcast contribution, and ongoing investments in advertising where revenue growth is expected to accelerate this year. We continue to view Spotify as a long-term winner in music streaming with potential to reach 1 billion-plus subscribers by 2030.”
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