Chicago, IL – April 27, 2026 – Today, Zacks Investment Ideas feature highlights Spotify SPOT, Apple AAPL, Amazon AMZN and Alphabet GOOGL.
Investors who missed the massive, tech-driven stock market rally to new all-time highs might not want to chase skyrocketing stocks across AI and semiconductors.
Instead, it might be time to buy strong tech stocks still trading far below their highs.
Music streaming powerhouse Spotify is largely immune to AI disruptions, oil shocks, and other headwinds. Yet SPOT stock is down roughly 33% from its June 2025 highs heading into its Q1 earnings release on Tuesday, April 28.
Wall Street might be a bit nervous about how the company will perform after its co-founder, Daniel Ek, officially stepped down as CEO in January—it was first announced in September.
Thankfully, he remains a driving force at Spotify. As Executive Chairman, Ek will “determine capital allocation, map the long-term future of Spotify and continue to provide support and guidance to its senior team.”
On top of that, Spotify’s earnings and revenue growth outlook remain strong. Plus, it’s a well-run company that’s now churning out impressive free cash flow growth alongside its robust balance.
SPOT’s downturn, mixed with its strong earnings outlook, has it trading at a deep discount to its historic valuation levels.
Spotify permanently changed the music industry in the way Netflix altered Hollywood. The company recently celebrated its 20th anniversary back in March.
Investors looking for a tech company that’s not in danger of becoming obsolete in the AI age should consider Spotify.
Spotify’s pitch to Wall Street is straightforward: we operate a business unlikely to go out of style anytime soon. On top of that, our prices (Premium Individual: $12.99, Premium Family: $21.99, and so on) are reasonable enough that we will continue to grow during economic downturns because simple pleasures don’t get cut, especially not ones as entrenched as listening to music and podcasts (and audiobooks).
SPOT’s business model is straightforward, and its streaming app often becomes essential to users’ daily lives and routines. This backdrop helped Spotify roll out price hikes in 2023 and 2024. The company then followed those price increases with another round of hikes in early 2026.
The Stockholm, Sweden-headquartered company is thriving as users flock to the streaming service for music, podcasts, and, more recently, audiobooks. Despite competition from Apple, Amazon and Alphabet, Spotify remains the king of streaming music. Spotify reportedly holds ~32% of the global streaming music market share, blowing away No. 2 Apple Music’s ~15%.
Spotify grew its monthly active users by 85% between 2021 and 2025, soaring from 406 million to 751 million at the end of 2025. During that stretch, it expanded its paid Premium Subscribers by 60%, closing 2025 with 290 million.
Looking ahead, Spotify is projected to add another ~73 million monthly active users in 2026 to reach 824 million, according to our Zacks Key Company Metrics data. This would mark 10% YoY growth, roughly matching 2025’s 11% expansion.
Spotify started pivoting away from growth at all costs several years ago. Its price hikes and a dedication to streamlining its business (reducing headcount) helped Spotify report its first full-year profit in 2024 (soaring from an adjusted loss of -$2.96 per share in FY23 to +$5.95 in FY24).
The streaming music company then doubled its GAAP earnings in 2025 to reach $11.89 a share. It is projected to follow this up with another 32% growth in 2026 and 23% expansion in 2027 to hit $19.27 a share.
Spotify’s earnings revisions have trended lower recently, and its most accurate estimates came in below consensus. But SPOT crushed our EPS estimates by 63% and 105% in the past two quarters.
SPOT is projected to grow its revenue by 19% in 2026 and 14% in FY27 to $26.19 billion, after averaging 16% expansion in the past three years. The outlook would see it more than double its 2022 total.
The well-run firm is now churning out impressive free cash flow growth. Its balance sheet is also robust, with near-zero long-term debt alongside $10.7 billion in cash and equivalents.
Spotify expanded its shareholders’ equity by 250% in the between 2023 and 2025 as it reached a profitability pivot point.
Spotify stock has climbed 250% from its April 2018 IPO, including its 33% drop from its summer 2025 peaks.
Despite its fall, the stock is still up 270% in the past three years to blow away the Tech sector’s 130%.
The stock is attempting to find support at its 50-day moving average after meeting some resistance at the technical range.
On the valuation front, Spotify is trading at a 60% discount to its one-year highs and 44% value against its median at 31.5X forward 12-month earnings.
Some investors might want to wait to see how it performs in the immediate aftermath of its Q1 report. Those not interested in playing the market-timing game might want to consider buying some SPOT shares now and adding to their positions later.
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