Spotify Technology S.A. (NYSE:SPOT) stock is up 9% to trade at $572.63 today, after the music streaming giant issued an upbeat fourth-quarter profit forecast, fueled by AI initiatives and strong subscriber growth. The company reported third-quarter earnings of €2.48 (about $2.78) per share, missing Wall Street's estimate of €2.80 (about $3.14), while revenue of nearly €5 billion (about $5.6 billion) was roughly in line with expectations. However, monthly active users rose 11% year over year to 788 million, premium subscriptions climbed 9%, and gross margin hit a record 33%.
Today's rally has SPOT trading at its highest level since January with the shares on track to log their largest single-day percentage gain since May. The shares have added more than 13% over the past month, though they're still down 2% year to date.
Analysts are overwhelmingly bullish on Spotify stock. Of the 35 brokerages in coverage, 24 carry a "buy" or better rating, compared to 11 "holds." Meanwhile, the consensus 12-month price target of $606.94 sits just above SPOT's current perch, leaving room for price-target hikes. Pivotal Research already raised its target to $460 from $420 this morning.
Options traders are also leaning bullish today. Spotify's options order flow shows a positive net delta volume of 6,166 shares, with bullish pressure accounting for 54.6% of activity compared to 45.4% bearish pressure.
