While much of the stock market has been off to a rocky start in 2025, Spotify (SPOT) has been one of the rare success stories — significantly outperforming not only the broader market but also the once-dominant “Magnificent Seven” tech stocks. With economic uncertainty looming and many investors pulling back from growth stocks, Spotify's recent performance raises an important question: Is now the time to consider buying Spotify stock?
Let’s take a closer look at what’s driving Spotify’s rise — and whether it’s worth adding to your portfolio.
Spotify’s Strong Year-to-Date Performance
As of early March 2025, Spotify is up 28.06% year-to-date. That’s in stark contrast to the S&P 500, which is down 3.29% year-to-date and over 7% in the past month. Even popular tech names like Nvidia (-15%), Google (-13%), and Amazon (-11.2%) have seen double-digit declines.
Over the past year, Spotify is up a whopping 131.93%, and over five years, it’s risen an incredible 371.4% — a remarkable achievement for a company that only recently turned profitable.
Why Is Spotify Defying the Trend?
1. Record Streaming Demand
Recent data shows that streaming demand has reached all-time highs, and Spotify is perfectly positioned to capitalize. As the world’s leading music and podcast streaming service, it’s benefiting from both increased consumer demand and a growing user base.
2. Profitability Milestone
One of the biggest shifts in Spotify’s investment profile is that it has now achieved full-year profitability (as of 2024). For years, investors were hesitant due to Spotify’s lack of profits, but that concern has largely been put to rest. Now, with a positive net income, the stock is gaining more credibility among institutional and retail investors.
3. Economic Resilience
According to JP Morgan, Spotify and Meta are considered the top internet sector stocks likely to perform well even if the economy weakens. This makes Spotify an attractive option during uncertain times, especially as some investors move away from riskier or unprofitable tech stocks.
What the Insiders Say
Spotify also receives high marks from employees, suggesting solid internal management and workplace culture:
- 4 out of 5 stars employee rating
- 76% of employees would recommend working at Spotify
- 71% approve of the CEO, Daniel Ek
These internal ratings point to a well-run company, which often translates into better long-term performance for investors.
Analyst and Hedge Fund Sentiment
Spotify is receiving positive attention from Wall Street analysts:
- 63.4% of analysts rate it a buy
- 31.7% say hold
- Only 4.9% give it a sell rating
Hedge fund activity is also leaning bullish, with more funds buying than selling over the past several quarters. This institutional interest further underscores confidence in Spotify’s future growth.
Valuation and Growth
Spotify’s price-to-earnings (P/E) ratio is currently high — around 97 to 98 depending on the platform. That’s far above the typical value investor’s comfort zone (many prefer P/E ratios under 30). However, high-growth companies often justify higher P/E ratios, and Spotify's recent growth backs that up:
- Year-over-year revenue growth: +15.55%
- Net income growth: +624%
- Diluted EPS growth: +602%
- Net profit margin: +552.88%
Despite missing earnings per share (EPS) estimates in the past two quarters, Spotify beat revenue expectations in Q4 2024 and continues to show strong upward momentum.
Final Thoughts: Is Spotify Stock a Buy?
While the broader market struggles and the top tech names falter, Spotify continues to shine. Its record streaming demand, recent profitability, and positive analyst sentiment make it a compelling option for investors seeking growth and resilience.
Of course, with a high P/E ratio and occasional earnings misses, Spotify is not without risk. But if you’re looking for a stock that’s defying market trends and has room to grow, Spotify is definitely worth a closer look.
Disclaimer: This is not financial advice. Always do your own research or consult a professional before making investment decisions.