Spotify Technology S.A. (SPOT): A Bull Case Theory

We came across a bullish thesis on Spotify Technology S.A. on Chit Chat Stocks Newsletter’s Substack by Brett Schafer. In this article, we will summarize the bulls’ thesis on SPOT. Spotify Technology S.A.’s share was trading at $767.34 as of June 30^th. SPOT’s trailing and forward P/E were 116.93 and 70.42 respectively according to Yahoo Finance.

Spotify, founded in 2006 by Daniel Ek and Martin Lorentzon, has emerged as a dominant player in music and audio streaming by staying relentlessly focused on its core mission. Ek, who remains CEO, and Lorentzon together retain majority control through ownership certificates, giving them long-term alignment with shareholders. Since 2016, Spotify has grown its Monthly Active Users (MAUs) at a 24% CAGR, expanding from 91 million to 678 million.

Revenue has surged from $2.1 billion to $18.6 billion, growing at a 26.6% CAGR. This growth has been driven by several key factors. First, Spotify benefited from secular tailwinds as consumers shifted away from linear radio toward digital audio, a trend that legacy players like SiriusXM struggled to navigate. Second, Spotify’s laser focus on audio—unlike tech giants such as Apple or Amazon with sprawling product portfolios—allowed it to refine and dominate its niche.

Third, the company’s leadership under founder Ek enabled long-term thinking, with a clear strategic north star: increasing user engagement through consumption hours. When investors lost confidence during Spotify’s 2022 drawdown, falling 80% from highs, Ek stayed the course. He streamlined operations, made tough cuts in headcount, shut down low-return moonshots like the car streaming device, and finally raised subscription prices—only after reaching sufficient scale.

These decisions drove operating margins from -12% to +11%, proving Spotify’s unit economics could work. The market has responded by re-rating the stock dramatically, realizing that beneath the noise was a durable, founder-led business executing with discipline and vision.

Previously we covered a bullish thesis on Spotify Technology S.A. by Francesco Ferrari in February 2025, which highlighted margin expansion, product diversification, and operational efficiency. The company’s stock price has appreciated approximately 19% since our coverage. This is because the thesis played out. The thesis still stands as Spotify remains financially disciplined. Brett Schafer shares a similar view but emphasizes founder-led execution and strategic resilience.

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Disclosure: None. This article was originally published at Insider Monkey.