Spotify Technology shares rose on Tuesday after Morgan Stanley named the music streaming platform its top media and entertainment stock pick.
The call from analyst Benjamin Swinburne highlights growing optimism around Spotify’s pricing strategy, artificial intelligence initiatives, and content expansion, which could fuel further gains after a strong year for the stock.
Analyst sees pricing power and AI as key drivers
In a research note released Monday evening, Swinburne said Spotify is entering a new pricing cycle following enhancements to its free and Premium tiers.
He believes these moves will help accelerate both revenue and subscriber growth into next year.
“Having added significant value to its free and Premium tiers, Spotify in our view kicked off a new pricing cycle this Fall and is poised to accelerate growth into next year,” Swinburne wrote.
The analyst maintained an Overweight rating and a $800 price target, implying an 18% upside from Monday’s closing price of $675.53.
Swinburne pointed to potential future price increases, AI integration, and fresh content offerings as near-term growth catalysts for the company.
He also noted that Spotify’s efforts to leverage artificial intelligence could help the platform personalize user experiences, improve discovery tools, and enhance engagement — all of which support premium conversion rates and advertising growth.
Strong performance despite mixed earnings
Swinburne’s endorsement comes after Spotify’s stock has already had an impressive run in 2025, rising 53% year-to-date and 77% over the past 12 months, far outpacing the broader S&P 500.
This strong momentum has come even as the company reported a surprise second-quarter loss in July, which temporarily dampened investor sentiment.
Despite that setback, analysts and investors have continued to bet that Spotify’s subscriber base and revenue will keep expanding.
Swinburne’s note reflects this optimism, arguing that Spotify’s strategic adjustments — including pricing changes and the integration of new AI-driven features — position it for sustained growth.
He also highlighted the company’s potential to convert free-tier users to paying customers as Spotify “continues to add new features and functionality to its Premium tier.”
Global price increases and market outlook
Spotify announced a series of price increases in August for Premium subscribers across multiple regions, including South Asia, the Middle East, Africa, Europe, Latin America, and the Asia-Pacific.
Analysts view these hikes as a sign that the company is confident in the value it provides and its ability to retain users despite higher prices.
The adjustments could translate into stronger revenue growth in coming quarters, particularly as Spotify pairs pricing power with enhanced features and broader AI integration.
In Tuesday afternoon trading, Spotify shares rose 2.1% to $689.82, reflecting investor enthusiasm following the Morgan Stanley note.
While competition in the streaming space remains intense, Swinburne’s call underscores Wall Street’s renewed confidence in Spotify’s ability to capitalize on innovation, pricing, and engagement to drive its next phase of growth.
With a growing global user base and strategic focus on technology and personalization, Spotify appears well-positioned to sustain its momentum heading into 2026.
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