Benchmark Research has retained its Buy recommendation on Spotify (NYSE:SPOT) and left its price objective unchanged at $760, calling the companys recent quarter "an exceptionally clean quarter." The $760 target implies substantial upside from the share price cited in Benchmarks note, and the firm reiterated its view that Spotifys scale and data assets position it well as the audio ecosystem adapts to AI-driven content dynamics.
The research note referenced a set of operating results that, in Benchmarks view, addressed investor concerns about average revenue per user, gross margins, and subscriber expansion. Benchmark also pushed back against narratives that generative AI music technology would undercut Spotifys business model, arguing instead that AI will create incentives for aggregation by platforms that can combine data, distribution, and industry relationships.
Market context and recent trading
Benchmarks commentary came with Spotify trading at $486.50 according to the figures cited alongside the note. InvestingPro data mentioned in the same context indicates the stock was trading near its Fair Value. Over the past week, Spotify has shown a strong short-term performance, delivering an 8.06% return, though shares remain down 18.03% year-to-date.
The company carries a market capitalization of $100.17 billion, and revenue growth over the last twelve months was recorded at 11.89%, figures cited by Benchmark that underline the firms argument for continued commercial momentum despite the year-to-date share price decline.
Benchmark on AI and Spotifys strategic posture
Benchmark emphasized managements view that AI will drive aggregation in the music and audio industries - a structural shift that should favor scaled platforms. The research house relayed Spotifys thesis that AI-generated content will expand the global audio catalog, thereby increasing the utility of Spotifys personalization, discovery, and monetization capabilities rather than diminishing them.
Importantly, Benchmark noted Spotify does not appear to be positioning itself to compete directly in AI model development or in building AI creation tools. Instead, Spotify aims to be the distribution and discovery platform where both AI-created and human-created audio can attain cultural relevance and be monetized at scale.
Analyst reactions to the quarter - a spectrum of views
Other research providers have offered a range of assessments following Spotifys fourth-quarter disclosures. Cantor Fitzgerald characterized revenue as largely meeting expectations while noting operating income exceeded estimates by 8%, and the firm reduced its price target to $525 while keeping a Neutral rating.
Bernstein maintained an Outperform rating and a $650 target, interpreting Spotifys Q4 results and Q1 guidance as favorable. Pivotal Research took a more cautious line, downgrading Spotify from Buy to Hold and trimming its price target to $420, citing concerns tied to the streaming market.
BofA Securities lowered its price target to $750 but retained a Buy rating, highlighting monthly active users and gross margins that beat forecasts. Morgan Stanley also trimmed its target to $650 but stayed Overweight, and reinstated Spotify as a Top Pick amid significant company changes referenced in analyst notes - including CEO Daniel Eks transition to Chairman and the companys adoption of generative AI.
Conclusion
Benchmarks reaffirmation of a Buy rating and a $760 price target centers on the firms view that Spotifys scale, data, and distribution create a defensive and potentially expanding position as AI expands the audio catalog. Market participants and other research houses remain split across ratings and price targets, reflecting differing assessments of both near-term financials and longer-term structural shifts in the streaming and audio markets.
Note: This article reports the analyst views, price targets, market capitalization, growth rates, recent stock performance, and rating actions as presented in the research summaries and analyst notes cited.