Traders who missed the large, tech-driven inventory market rally to new all-time highs may not wish to chase skyrocketing shares throughout AI and semiconductors.
As an alternative, it is perhaps time to purchase sturdy tech shares nonetheless buying and selling far beneath their highs.
Music streaming powerhouse Spotify SPOT is basically proof against AI disruptions, oil shocks, and different headwinds. But SPOT inventory is down roughly 33% from its June 2025 highs heading into its Q1 earnings launch on Tuesday, April 28.
Wall Road is perhaps a bit nervous about how the corporate will carry out after its co-founder, Daniel Ek, formally stepped down as CEO in January—it was first introduced in September.
Fortunately, he stays a driving drive at Spotify. As Govt Chairman, Ek will “decide capital allocation, map the long-term way forward for Spotify and proceed to offer assist and steerage to its senior crew.”
On prime of that, Spotify’s earnings and income development outlook stay sturdy. Plus, it’s a well-run firm that’s now churning out spectacular free money circulation development alongside its strong stability.
SPOT’s downturn, blended with its sturdy earnings outlook, has it buying and selling at a deep low cost to its historic valuation ranges.
Purchase this Tech Inventory Now and Maintain Perpetually
Spotify completely modified the music trade in the best way Netflix altered Hollywood. The corporate lately celebrated its 20th anniversary again in March.
Traders in search of a tech firm that’s not in peril of turning into out of date within the AI age ought to take into account Spotify.
Spotify’s pitch to Wall Road is easy: we function a enterprise unlikely to exit of fashion anytime quickly. On prime of that, our costs (Premium Particular person: $12.99, Premium Household: $21.99, and so forth) are cheap sufficient that we’ll proceed to develop throughout financial downturns as a result of easy pleasures don’t get lower, particularly not ones as entrenched as listening to music and podcasts (and audiobooks).
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SPOT’s enterprise mannequin is easy, and its streaming app usually turns into important to customers’ each day lives and routines. This backdrop helped Spotify roll out worth hikes in 2023 and 2024. The corporate then adopted these worth will increase with one other spherical of hikes in early 2026.
The Stockholm, Sweden-headquartered firm is prospering as customers flock to the streaming service for music, podcasts, and, extra lately, audiobooks. Regardless of competitors from Apple AAPL, Amazon, and Alphabet, Spotify stays the king of streaming music. Spotify reportedly holds ~32% of the worldwide streaming music market share, blowing away No. 2 Apple Music’s ~15%.
The Tech Inventory’s Progress Outlook that is NOT Primarily based on AI Hopes
Spotify grew its month-to-month lively customers by 85% between 2021 and 2025, hovering from 406 million to 751 million on the finish of 2025. Throughout that stretch, it expanded its paid Premium Subscribers by 60%, closing 2025 with 290 million.
Trying forward, Spotify is projected so as to add one other ~73 million month-to-month lively customers in 2026 to succeed in 824 million, in line with our Zacks Key Firm Metrics information. This could mark 10% YoY development, roughly matching 2025’s 11% enlargement.
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Spotify began pivoting away from development in any respect prices a number of years in the past. Its worth hikes and a dedication to streamlining its enterprise (decreasing headcount) helped Spotify report its first full-year revenue in 2024 (hovering from an adjusted lack of -$2.96 per share in FY23 to +$5.95 in FY24).
The streaming music firm then doubled its GAAP earnings in 2025 to succeed in $11.89 a share. It’s projected to observe this up with one other 32% development in 2026 and 23% enlargement in 2027 to hit $19.27 a share.
Spotify’s earnings revisions have trended decrease lately, and its most correct estimates got here in beneath consensus. However SPOT crushed our EPS estimates by 63% and 105% up to now two quarters.
SPOT is projected to develop its income by 19% in 2026 and 14% in FY27 to $26.19 billion, after averaging 16% enlargement up to now three years. The outlook would see it greater than double its 2022 complete.
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The well-run agency is now churning out spectacular free money circulation development. Its stability sheet can also be strong, with near-zero long-term debt alongside $10.7 billion in money and equivalents.
Spotify expanded its shareholders’ fairness by 250% within the between 2023 and 2025 because it reached a profitability pivot level.
Purchase the AI-Proof Tech Inventory On the Dip for Progress, Worth, and Upside
Spotify inventory has climbed 250% from its April 2018 IPO, together with its 33% drop from its summer season 2025 peaks.
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Regardless of its fall, the inventory continues to be up 270% up to now three years to blow away the Tech sector’s 130%.
The inventory is searching for assist at its 50-day shifting common after assembly some resistance on the technical vary highlighted in blue beneath.
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On the valuation entrance, Spotify is buying and selling at a 60% low cost to its one-year highs and 44% worth towards its median at 31.5X ahead 12-month earnings.
Some buyers would possibly wish to wait to see the way it performs within the instant aftermath of its Q1 report. These not eager about enjoying the market-timing sport would possibly wish to take into account shopping for some SPOT shares now and including to their positions later.
7 Finest Shares for the Subsequent 30 Days
Simply launched: Consultants distill 7 elite shares from the present record of 220 Zacks Rank #1 Sturdy Buys. They deem these tickers “Most Doubtless for Early Value Pops.”
Since 1988, the total record has crushed the market greater than 2X over with a median acquire of +23.9% per yr. So remember to give these hand picked 7 your instant consideration.
Apple Inc. (AAPL) : Free Inventory Evaluation Report
Spotify Know-how (SPOT) : Free Inventory Evaluation Report
This text initially printed on Zacks Funding Analysis (zacks.com).
The views and opinions expressed herein are the views and opinions of the creator and don’t essentially replicate these of Nasdaq, Inc.
