'Consider This Dominant Player,' Says Top Investor About Spotify Stock

Spotify (NYSE:SPOT) didn't exactly end 2025 on a strong note, as its share price lost some 20% of its value during the last half of the year.Claim 70% Off TipRanks This Holiday SeasonUnlock hedge fund-level data and powerful investing tools for smarter, sharper decisions Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential A rough Q2 2025 – during which Spotify clocked in a 42 euro cent loss – sent the share price spiralling at the end of July. An additional bump in the road came in September, when Founder and CEO Daniel Ek announced his intention to transition to the role of executive chair at the start of 2026. Still, the company had plenty of good news to trumpet during their latest quarterly report in early November. The company grew its monthly active users by 11% on a year-over-year basis, reaching 713 million. Revenue also grew, up 12% on a constant currency basis, while the company's gross margin of 31.6% exceeded guidance. In addition, the company emphasized that the leadership transition simply formalizes the way that Spotify has been operating for a few years now, as Ek had let go of many of his responsibilities running the day-to-day operations. Top investor Prosper Junior Bakiny cites SPOT's strong industry position as one of the main reasons to remain optimistic about the company going forward. "Spotify could remain the dominant player in music (and audio) streaming for a long time and deliver excellent returns along the way," explains the 5-star investor, who is among the top 2% of stock pros covered by TipRanks. Bakiny points out that Spotify offers a "vast library" of content, spanning music to podcasts. The company has pursued a strategy of signing deals with record labels, which allows it to enjoy strong network effects. "The larger its music library, the more attractive its service is to consumers, and the more listeners its platform has, the more appealing it will be to musicians," emphasizes Bakiny. The company is also enjoying improving fundamentals, adds the investor. Spotify continues to post strong revenue growth, in large part due to the increasing number of paid subscriptions. Moreover, Bakiny notes that its premium subscriptions are still less than 40% of total users, leaving plenty of room for additional growth. That doesn't mean that challenges aren't on the horizon, however. Bakiny points out that the big tech companies and their own music offerings – he namechecks Apple, among others – could weigh on the share price. Still, that doesn't stop Bakiny from believing that SPOT can serve as a nice option for investment portfolios. "It could generate solid returns over the long run," concludes Bakiny. (To watch Prosper Junior Bakiny's track record, click here) Wall Street seems ready to tune into SPOT as well. With 15 Buys and 6 Holds, SPOT enjoys a Moderate Buy consensus rating. Its 12-month average price target of $760.79 hints at an upside of more than 30% in 2026. (See SPOT stock forecast)