Spotify Stocks on Quarter-Long Downtrend, Yet Analysts Remain Optimistic About Hitting $900 Mark

Market analysts have recently issued aggressive, positive forecasts for Spotify Technology S.A. (trading publicly as SPOT), with some predicting the stock could soar to $900 per share. However, despite this bullish sentiment from financial institutions like Bank of America Securities, the stock has struggled to maintain momentum, recently crossing under the $600 mark. While the current price of approximately $582 represents a nearly 30% increase since the beginning of 2025, it still reflects an 18% falloff over the last six months, leaving investors to question the widening gap between analyst expectations and market reality.

In an in-depth analysis run by Digital Music News, one significant factor contributing to investor hesitation is the impending leadership transition. Daniel Ek, Spotify's founder and long-time CEO, will step down from his role on January 1, 2026. Ek will transition to the position of Executive Chairman, handing over the daily operations to co-CEOs Gustav Söderström and Alex Norström. While the company has framed this move as a formalization of how it already operates, the exit of a founder-CEO often introduces a period of perceived uncertainty that can weigh on share prices.

Advertising Revenue and Growth Concerns

Beyond leadership changes, Spotify faces challenges in its advertising business. Despite high-profile partnerships with firms like WPP and a massive expansion into video podcasts, the company reported a 6% year-over-year decline in ad-supported revenue during the third quarter of 2025. This downturn has raised alarms about the platform's ability to monetize its 700+ million monthly active users effectively. While the company recently loosened restrictions on its free tier to drive engagement, Wall Street is closely watching the fourth-quarter results to see if an "advertising turnaround" is truly underway.

To combat rising costs, Spotify has implemented a series of price hikes across major markets, including the UK, Switzerland, India, and Saudi Arabia. In the UK, for example, the Premium Individual plan rose to £12.99, marking the second increase in 18 months. Analysts from Morgan Stanley and Deutsche Bank remain bullish, suggesting these hikes demonstrate "pricing power" and will significantly boost 2026 margins.

However, the risk remains that subscribers may eventually migrate to competitors like Apple Music or Amazon Music, which have occasionally held prices steady during Spotify’s adjustment periods. While recent data suggests subscriber demand is inelastic, the cumulative effect of multiple increases—paired with a soft advertising market—has led some firms like Goldman Sachs and Erste Group to downgrade the stock, contributing to the current "sagging" price action.

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