3 Reasons To Invest in Spotify, According to Experts

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If you’re wondering what your financial wrap for the year will look like and want to invest in entertainment stocks, it might make sense to start with what you use in your own life. Put your finances on your favorite playlist, so to speak.

So, if you’re one of the millions of people who use Spotify (SPOT) for music, you might be wondering whether it’s a good investment. Here are some details on Spotify’s business and whether it’s a good idea to put your money where your music is.

Quick Take: Is Spotify a Good Investment?

Guggenheim Securities analyst Michael Morris highly supports Spotify stock. In fact, he upped his price target to $520 from $500 in January, which it has currently blown past. He said at the time, “Our investor conversations have largely focused on gross margin trends in 2025, where we forecast another year of expansion (+200 basis points to 32%) albeit at a slower rate than the record 2024 pace, which was fueled by the bundle and a reduction in exclusive podcast content spend.”

Spotify’s recent stock surge has been fueled by the company recording its first full year of profitability. Here are the numbers as of Feb. 21, 2025: 

• Stock price: $631.50
• Market cap: $126.81 billion
• 52-week high: $652.53
• 52-week low: $239.66

With those statistics in mind, here are three reasons you should consider investing in Spotify.

Find Out: How To Get a 10% Return on Investment (ROI): 10 Proven Ways 

It’s the World’s Largest Music Streaming Platform 

Spotify is the world’s largest music streaming platform, with a much bigger market share than competitors like Tencent Music. This bodes well for investors, as many analysts are optimistic about the near future. Spotify already built a massive user base for its streaming music service, but now it’s expected that its focus will be on profits. That could include more price hikes.

Spotify has done a good job raising its customer base. It ended 2023 with more than 600 million users worldwide, including more than 236 million paying customers. Spotify has a free, ad-supported service along with its ad-free subscription option.

As of December 2024, it again grew substantially with more than 675 million monthly active users. This included an increase to 263 million paid subscribers

Based on the subscriber numbers, Spotify customers seem to be fine with increased prices for the service. The fact that the company is looking to raise prices signals to analysts that it is providing value to its customers. Plus, the inclusion of audiobooks has helped Spotify see even more growth.

Spotify Invests Heavily in Tech and AI 

Though some people may have reservations about artificial intelligence, in the streaming world it is a key component of success. Spotify is investing deeply in AI, which helps the platform create a more personalized and curated user experience.

AI contributes to this by powering Spotify’s recommendation engine to help send you what’s relevant to your tastes. There are also features such as AI DJ, which can put together a playlist for you, including commentary and playback, without you having to spend your own time doing so.

Spotify Is Putting Up Record Numbers

As far as investments go, Spotify’s surging revenue and profits as of late are not to be ignored. Along with record numbers for subscribers moving through the first quarter of 2025, these profits also fuel Spotify’s stock price. 

CNET has ranked Spotify as a top pick for music streaming. The selection comes because Spotify reportedly has the biggest music catalog for all genres and some fantastic social features. Spotify also is known by its users for its playlist capabilities to create ones that reflect your tastes, moods and even adapt to the time of day.

Many experts agree that the company’s long-term forecast suggests it will grow significantly in both profit and returns throughout 2025 and beyond. With so many analysts encouraged about Spotify’s future, it might be time to consider it as an investor if you haven’t already. Of course, as with any stock, be sure to do your own research before investing.

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