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

We came across a bullish thesis on Spotify Technology S.A. on Investment Ideas by Antonio’s Substack by Antonio Linares. In this article, we will summarize the bulls’ thesis on SPOT. Spotify Technology S.A.’s share was trading at $508.70 as of January 28th. SPOT’s trailing and forward P/E were 64.41 and 37.59 respectively according to Yahoo Finance.

Spotify Technology S.A., together with its subsidiaries, provides audio streaming subscription services worldwide. It operates through two segments, Premium and Ad-Supported. SPOT continues to demonstrate its ability to drive value through relentless iteration and a disciplined focus on long-term customer value.

The company has grown monthly active users (MAUs) sixfold since 2016, while free cash flow per share has expanded 27-fold, reflecting the power of its operational model, often described as the Costco Algorithm, where price increases are absorbed with minimal churn. This growth is underpinned by Spotify’s commitment to solving acute user problems through continuous experimentation and rapid deployment of new features, now accelerated by AI-driven capabilities.

The recent introduction of an agentic layer atop its traditional backend enables Spotify to “speak” features into existence, markedly increasing the pace of product innovation. Management emphasizes optimizing for lifetime value rather than quarterly results, creating a compounding flywheel of improved engagement, retention, and subscription growth, which in turn strengthens the business and partner outcomes. The company’s expanding ecosystem—now including TV, podcasting, and media discovery—illustrates its evolution beyond music into a broader media platform and search engine.

Leadership transition from Daniel Ek to co-CEOs Gustav Soderstrom and Alex Norstrom appears to maintain the company’s disciplined culture, ensuring organizational properties remain top-tier and capable of sustaining long-term outperformance. With a world-class value-to-price ratio, accelerating MAU growth, and increasing free cash flow per share, Spotify is positioned to continue delivering exceptional shareholder returns. The combination of operational excellence, AI-enabled iteration, and a disciplined focus on long-term value creates a compelling investment opportunity with significant upside potential over time.

Previously, we covered a bullish thesis on Spotify Technology S.A. (SPOT) by Kroker Equity Research in April 2025, which highlighted Spotify’s transformation into a profitable, cash-generating business through pricing power and cost discipline. SPOT’s stock price has depreciated by approximately 7.36% since our coverage. Antonio Linares shares a similar view but emphasizes execution, AI-driven efficiency, and the agentic layer enabling faster product iteration and long-term value creation.

Spotify Technology S.A. is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 116 hedge fund portfolios held SPOT at the end of the third quarter which was 111 in the previous quarter. 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.