Spotify's 4.9% Rally Hits 21st in Trading Volume as Analysts Split on Profitability Outlook

On July 30, 2025, Spotify Technology (SPOT) rose 4.91% to $635.91 per share, with a trading volume of 3.77 billion, ranking 21st in market activity. Analysts highlighted renewed optimism following a post-earnings decline, emphasizing the stock's potential amid evolving market dynamics.

Wall Street analysts remain cautiously bullish, with 63.6% of 33 brokerage firms issuing "Strong Buy" ratings for SPOT. However, experts caution against overreliance on these recommendations, noting historical biases in sell-side research. Earnings estimate revisions for Spotify have shown a 2.5% decline in the current fiscal year's consensus, driven by analysts' growing pessimism about near-term profitability. This trend contributed to a Zacks Rank #4 (Sell) designation, signaling potential short-term volatility despite strong user growth metrics.

Spotify reported 10% year-over-year revenue growth in Q2 2025, with 696 million monthly active users and 276 million premium subscribers. While gross margins improved to 31.5% (up 227 basis points year-over-year), total revenue and operating income fell short of guidance. Rising operating expenses, particularly in labor and cloud infrastructure, pressured margins. The company also revised its Q3 outlook downward, forecasting $4.2 billion in revenue against $5.15 billion analyst expectations.

The strategy of purchasing the top 500 stocks by daily trading volume and holding them for one day yielded a 166.71% return from 2022 to the present, significantly outperforming the benchmark’s 29.18% return. This underscores the strategy's strong profitability over the period, driven by liquidity and investor interest in high-volume equities.