Bernstein has reaffirmed an Outperform rating on Spotify (NYSE:SPOT) and reiterated a $650.00 price target in the wake of the company’s fourth-quarter results. The target implies about a 34% upside relative to the cited stock price of $484, even as InvestingPro data indicates the share price is trading near its Fair Value.
The equity rose sharply on the earnings report, closing up roughly 15% after what Bernstein characterized as "stellar" Q4 results accompanied by "promising" guidance for Q1. That move is part of a recent rebound that has driven Spotify roughly 8.06% higher over the past week, although the share price remains down 18.03% year-to-date.
In commentary cited by Bernstein, co-CEO Alex Norstrom framed 2026 as "The Year of Raising Ambition," signaling a company focus on both innovation and monetization initiatives. InvestingPro data included in the review shows Spotify holding more cash than debt on its balance sheet and generating cash flows sufficient to cover interest expense.
Bernstein also framed the stock’s recovery as a partial reversal of an earlier sell-off in January that the firm attributed to "perceived existential threats from music generation & manipulation startups" such as Suno, Udio, and Klay. Looking ahead, Spotify has scheduled an investor presentation for May 21. Bernstein suggested that the "next phase of music industry growth" could center on a shift in consumption from "passive, plain-vanilla listening to high-touch, personalized engagement."
Analyst responses to Spotify’s quarterly results have varied:
- BofA Securities described the quarter as "solid," noting that monthly active users and gross margins came in ahead of forecasts while revenue modestly beat expectations. BofA raised its price target to $750 and kept a Buy rating.
- Guggenheim lowered its price target to $720, citing higher capital costs, but acknowledged Spotify’s broad-based beat and record growth in monthly active users.
- Morgan Stanley moved its price target to $650 while maintaining an Overweight rating, highlighting strategic shifts at the company and the CEO’s transition to a Chairman role, and pointing to Spotify’s aim to become an intelligent media platform.
- Citizens reiterated a Market Outperform rating and set a $800 price target, calling out Spotify’s multi-vertical platform and noting a substantial user base of 751 million monthly active users.
- Pivotal Research took a more cautious stance, downgrading Spotify from Buy to Hold due to concerns about the streaming market despite acknowledging the company’s strong market position.
Taken together, these analyst moves capture a range of convictions about Spotify’s near-term fundamentals and longer-term strategy. Several firms emphasized user growth and margin performance in the quarter, while others flagged higher costs or broader market uncertainty as reasons for more conservative valuations.
Summary: Bernstein’s reiteration of an Outperform rating and $650 price target follows a Q4 print that attracted a spectrum of analyst reactions. The stock’s sizable intraday gain after results reflects renewed investor interest but also follows earlier volatility tied to perceived AI-related threats in the music ecosystem. An investor presentation scheduled for May 21 will offer another formal forum for Spotify to outline its plans around engagement shifts and monetization.