Here's How Spotify (SPOT) Can Improve the Service Value

Montaka Global Investments, an investment management company, released its second-quarter 2025 investor letter. A copy of the letter can be downloaded here. The firm is focused on sustainably compounding its portfolio over the long term. The June quarter was interesting for investors. In the first week, Trump’s ‘Liberation Day’ tariff policy caused a double-digit drop in the S&P 500. However, the index then rebounded nearly 25%, despite ongoing Israeli and US attacks on Iran. Although volatile, such market swings can create attractive investment opportunities. Montaka’s portfolio is highly concentrated, with the top 10 investments representing 76% of the portfolio. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its second-quarter 2025 investor letter, Montaka Global Investments highlighted stocks such as Spotify Technology S.A. (NYSE:SPOT). Headquartered in Luxembourg City, Luxembourg, Spotify Technology S.A. (NYSE:SPOT) offers audio streaming subscription services. The one-month return of Spotify Technology S.A. (NYSE:SPOT) was 3.74%, and its shares gained 87.24% of their value over the last 52 weeks. On September 23, 2025, Spotify Technology S.A. (NYSE:SPOT) stock closed at $718.94 per share, with a market capitalization of $147.942 billion.

Montaka Global Investments stated the following regarding Spotify Technology S.A. (NYSE:SPOT) in its second quarter 2025 investor letter:

"In a recent presentation to investors, I asked what the companies on the left (below) all have in common. It’s perhaps not immediately obvious what a payments company has in common with a retailer; or what an asset manager has in common with an audio streaming platform. (Of course, all of these companies are owned by Montaka at present.)

It is only with the conceptual model of ‘flywheels’ that investors can connect these seemingly disparate businesses.

Firstly, Spotify Technology S.A. (NYSE:SPOT). With a free ad-supported tier and a low subscription price, customers get enormous value at minimal cost. As more people use the service, Spotify learns more about consumer preferences. This data informs the company about how it can further improve the value of the service for all users."

Spotify Technology S.A. (NYSE:SPOT) is in 25th position on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 111 hedge fund portfolios held Spotify Technology S.A. (NYSE:SPOT) at the end of the second quarter, up from 106 in the previous quarter.  While we acknowledge the potential of Spotify Technology S.A. (NYSE:SPOT) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Spotify Technology S.A. (NYSE:SPOT) and shared best performing European stocks to invest in. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.