Spotify Technology S.A. (SPOT)’s Growth Story Faces Ad Monetization Test

Spotify Technology S.A. (NYSE:SPOT) is one of the best large cap stocks to buy in 2026 according to billionaire Dan Loeb.

On April 29, Benchmark lowered its price target on Spotify Technology S.A. (NYSE:SPOT) to $695 from $760, while maintaining a Buy rating. Analyst Mark Zgutowicz flagged concerns over Spotify’s cost structure disclosures, noting management provided a cost bridge without corresponding revenue projections.

The firm highlighted three key issues: ad monetization lagging behind engagement growth, an unclear commercial strategy for AI-generated music, including rights and royalties, and a largely qualitative payback period for current AI and research spending.

Benchmark emphasized that Spotify has yet to explain why advertising revenue trails engagement beyond programmatic pricing pressures, and investors remain unconvinced about a long‑awaited second‑half advertising rebound. With EPS and revenue estimates are trending lower in recent months, the firm said the burden of proof now shifts to Spotify’s Investor Day on May 21.

Despite near‑term concerns, Benchmark maintained confidence in Spotify’s broader strategic direction, suggesting the company’s long‑term growth story remains compelling if it can demonstrate clearer monetization strategies and stronger returns on AI investment.

Spotify Technology S.A. (NYSE:SPOT) offers global audio streaming services through two main segments: Premium and Ad-Supported. The Premium segment provides subscribers with online and offline access to Spotify’s catalog of music and podcasts, along with select features such as video, lossless audio, and audiobooks in certain markets.

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