We recently published a list of 15 Best Stocks to Buy According to Jim Simons’ Renaissance Technologies In this article, we are going to take a look at where Spotify Technology S.A. (NYSE: SPOT) stands against other best stocks to buy according to Jim Simons’ Renaissance Technologies.
Even after his passing in 2024, billionaire investor and mathematician Jim Simons remains known as the “Quant King” of hedge funds due to the extraordinary success of Renaissance Technologies, his quantitative trading firm based in New York. After years of researching the finance industry, Simons realized the untapped potential of employing quantitative analysis to capitalize on market inefficiencies. This insight led him to develop a data-driven investment strategy of analyzing market behavior solely using statistical and mathematical models. By identifying subtle, non-random patterns in financial data, the quant genius predicted future stock movements and generated impressive returns.
Although it is closed to outside investors, Jim Simons’ secretive Medallion hedge fund, a flagship of Renaissance, has produced ground-breaking results since its inception. The Medallion Fund raked in impressive returns of 56.6% and 74.6% during the early 2000s dot-com crash and the global financial crisis between 2007 and 2011. The fund has maintained a substantial annual return of 31.5% since its first two years of operation. At the time of his death, Simons was worth $31.4 billion, ranking him among the world’s wealthiest individuals, thanks to the strong market performance of the Medallion Fund and Renaissance.
READ ALSO: Billionaire David Einhorn’s 10 Stock Picks with Huge Upside Potential and Billionaire Michael Platt’s 10 Stock Picks with Huge Upside Potential.
Renaissance Technologies’ computer-driven powerhouse came off to a great start after a stellar performance in 2024. The Renaissance Institutional Diversified Alpha Fund has gained 9.05% as of February, continuing to build on its impressive 2024 return of 15.6%, which was its best since its inception in 2021. Meanwhile, the Renaissance Institutional Equities Fund has had its best start in over ten years, rising 11.85% in the first two months of 2025. Both funds are allowed to maintain sizable individual stock positions in addition to using stock index futures and options to help manage risk. However, the firm warns that it may be difficult to quickly unwind these sizable holdings without impacting market prices.
Our Methodology
For this list, we picked stocks from Renaissance Technologies’ 13F portfolio as of the end of the fourth quarter of 2024. These equities are also popular among elite hedge funds.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A person wearing headphones listening to an audio streaming service.
Spotify Technology S.A. (NYSE:SPOT)
Renaissance Technologies Q4 Stake: $454.8 million
Number of Hedge Fund Holders: 101
Spotify Technology S.A. (NYSE: SPOT), a leader in digital music streaming, is renowned for revolutionizing the music industry. The company has transformed how music is monetized by compensating artists based on song streams, rather than traditional revenue models that rely on album sales and live performances.
On April 30, Batya Levi and other UBS analysts reiterated their Buy rating for Spotify Technology S.A. (NYSE:SPOT) stock, maintaining a price target of $680. The endorsement follows Spotify’s most recent financial report, which showed that, although revenue growth on a foreign exchange-neutral (FXN) basis slowed to 15% year-over-year, down from 17% in the previous quarter, the company’s subscriber numbers exceeded projections. Additionally, the company’s gross margins increased by about 400 basis points, lower than the 550 basis points in the previous quarter. Despite this, Spotify’s management has reaffirmed its goal of increasing gross margins by 2025, albeit at a more gradual pace with expected fluctuations throughout the year.
In the US, UK, Canada, and Australia, Spotify Technology S.A. (NYSE: SPOT) has also introduced Partner Programs that enable video podcast creators to earn money from their work in various revenue streams. As a result, creator payouts rose by a notable 300% in just one month, while the platform’s video podcast consumption grew by more than 20%.
Baron Focused Growth Fund stated the following regarding Spotify Technology S.A. (NYSE:SPOT) in its Q1 2025 investor letter:
“Spotify Technology S.A. (NYSE:SPOT) is a leading global digital music service offering on-demand audio streaming through paid premium subscriptions and an ad-supported model. Shares were up, once again attributable to another impressive beat in gross margins and a healthy increase in operating margins. Spotify has been on a path to structurally increase gross margins, aided by its high-margin artist promotions marketplace, growing contribution from podcasts, and structural investments in advertising. Users continued to grow at a double-digit pace despite price hikes. Spotify also continued to innovate on the product side, calling 2025 the “year of accelerated execution,” with priorities in improving advertising, expanding into video, developing a Super Premium tier, and taking more market share. We view Spotify as a long-term winner in music streaming with potential to reach 1 billion-plus monthly active users.”
Overall, SPOT ranks 12th on our list of best stocks to buy according to Jim Simons’ Renaissance Technologies. While we acknowledge the potential for 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. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than SPOT but trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.