Spotify (NYSE:SPOT) may seem like an expensive proposition trading closer to $1,000 per share than $100 but the expectations for growth are very high for the world’s leading music-sharing platform. SPOT share price has leapt by more than 120% in the past year and it has outperformed larger rivals.
Is Spotify a millionaire-maker stock that will have investors playing a sweet tune?
Why Investors Think Spotify Is Hitting the Right Notes
Investors see several positives for Spotify. The audio streamer’s stock is up 670% since late 2022, compounding at north of 128%.
Spotify turned a profit for the first time in 2024, to the tune of $1.2 billion net profit. By comparison, it saw a net loss of $1 billion in 2022. A combination of slashing expenses and price hikes turned profitability around.
To bolster Spotify’s status as the industry leader, subscribers didn’t flee the service when the price increases went into effect. Having demonstrated pricing power, expect a series of ongoing price hikes long into the future.
Price increases translated to the top line which rose by $2 billion a year or more from 2022 to 2024. Analysts are currently singing an upbeat tune about future prospects. By 2026, analysts see Spotify eclipsing $22.5 billion in revenue, a figure that is more than double the revenue from 2021.
If you’re looking for a recession-proof technology stock, streaming services are a good bet. Spotify’s share price has risen 45% in 2025 alone, despite markets going down due to tariffs and instability.
Despite the elevated share price of around $650, Spotify’s price-to-earnings ratio of 108 highlights the confidence investors have in this stock. The price-to-book ratio is nearly 20x.
Spotify stock may now be approaching overvaluation territory that might scare investors away but it also indicates that they have high expectations for the business model prospects.
Earnings per share have consistently delivered above $1 over the past 12 months, from $1.88 EPS in February 2025 to $1.13 in April 2025.
Analysts predict an EPS of $2.53 by the end of July 2025. They also expect the stock price to approach $800 in the same time frame. Experts also see an EPS of $10.23 for all of 2025 and $13.10 for 2026.
Why Is Spotify So Successful?
The music-streaming service may seem like it’s a one-trick pony with over 100 million songs. But the company has made it easy for people to enjoy its offerings thanks to the limitless number of songs users can put into their library. It has a vast selection of local acts that people can find and a beta version of an AI-powered playlist that helps users find similar artists.
Whereas rivals focus on music, Spotify has nearly 7 million podcast titles and 350,000 audiobooks. Diversification is part of the key to its growth. For comparison, look at Apple Podcasts, perhaps the first such streaming service to focus on podcasting. Apple features over 2.5 million titles as a separate service from Apple Music, falling far short of Spotify’s numbers.
By catering to users, the platform has become the world leader in audio streaming with more than 678 million monthly active users. This figure was a rise of 35 million compared to analysts’ predictions of just 10 million more.
The streamer also touts 268 million paid subscribers in more than 180 markets, which led to premium revenue growth of 19% year over year based on Q4 2024 figures.
These numbers have risen despite a price increase, which indicates paid subscribers love the platform. Free users are served advertisements, which also helps Spotify earn revenue.
Spotify also pays the artists who put their material on the platform. In 2024, the company touted that it paid a record $10 billion to the music industry. It’s the highest annual payment figure from a single source, and so helps the platform retain artists.
How Do Spotify’s Rivals Stack Up?
Spotify has outplayed and outmaneuvered titans like Amazon (AMZN), with its Amazon Music platform and 79 million subscribers, Apple (AAPL) and its music streaming service garnering 93 million subscribers, and YouTube Music.
Spotify holds a 32% market share of music streaming services. Second place is Apple Music, which has less than half of Spotify’s market share. The industry is predicted to grow to nearly $43 billion by 2029, up from $35.5 billion in 2025. Expect Spotify to maintain its grip as the top audio streaming service for the next several years and increase subscribers and revenue.
Smaller, dedicated audio platforms include Tencent Music Entertainment (TME), with 576 million active users and revenue of $4 billion. Another smaller rival, iHeartMedia (IHRT), has 250 million subscribers. Its market cap is a paltry $162.3 million with revenue of $3.9 billion.
The parent company of iHeartRadio has seen stock prices dip 50% in the past 12 months. Meanwhile, Tencent has risen nearly 7% in the same period.
If you want a value stock that could see a strong long-term performance, Tencent is one alternative to Spotify’s sky-high price.
Is Spotify a Millionaire Maker to Invest in Now?
Spotify does have the potential to make millionaires over the next decade but likely only if bought after a dip because it’s fully valued according to analysts who have a $653 per share price target.
The detriments to the bull thesis are first the hefty current price near analysts intrinsic value as well as the fact that Spotify has never paid its shareholders dividends so selling at higher prices is needed to lock in gains versus simply relying on an income stream.
Nonetheless, the highest upside target price is close to $800, nearly 21% higher than its current price. Over the next 52 weeks, Spotify could rise nearly 39% based on the past 7 years of stock performance. Its current rating of 94 out of 100 shows the strength of Spotify’s position as a Buy for investors.
If you love audio streaming services to diversify your tech stocks, Spotify could be one way to strengthen your portfolio.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.