Morgan Stanley said that it sees Spotify’s shares being down year-to-date ahead of the company’s likely new product in the coming months, including new AI features, presenting “an attractive opportunity.”
- Morgan Stanley raised the price target on Spotify to $640 from $610 and maintained an ‘Overweight’ rating on the shares.
- Analysts expect the company to post earnings per share of €2.75 ($3.17) on revenue of €4.79 billion ($5.5 billion) for the second quarter.
- On Stocktwits, retail chatter around the stock surged 850% over 24 hours as investors actively discussed the expected outcome of the earnings results.
Shares of Spotify Technology S.A. (SPOT) edged 0.55% higher in the premarket session on Tuesday ahead of the company’s second-quarter (Q2) results.
On Monday, Morgan Stanley raised the price target on Spotify to $640 from $610 and maintained an ‘Overweight’ rating on the shares. The updated target implies an upside of more than 25% from its last close.
Meanwhile, retail chatter around the stock surged 850% over 24 hours as investors actively discussed the expected earnings results.
Why Did Morgan Stanley Hike SPOT’s Target?
According to TheFly, Morgan Stanley said that it sees the shares being down year-to-date ahead of the company’s likely new product in the coming months, including new AI features, presenting “an attractive opportunity.”
Spotify has recently expanded its AI offerings with a ChatGPT-like conversational music assistant for Premium users, while also providing features like AI-powered playlist creation, transparency labels for AI-generated content, and a planned licensed AI remix and cover features.
The analyst also said that Spotify’s path to sales growth reacceleration and margin expansion would drive the stock higher.
What’s Wall Street Expecting From Q2?
Analysts expect the company to post earnings per share of €2.75 ($3.17) on revenue of €4.79 billion ($5.5 billion) for the latest quarter.
This compares to a loss per share of €0.42 on revenue of €4.19 billion in the previous quarter, implying an increase of about 14% in revenue and a shift to profitability compared to the previous year’s quarter.
Markets are likely to key in on whether Spotify can moderate operating expense growth following its recent AI investments while maintaining strong monetization trends. Premium tier adoption, early traction for higher-priced subscription offerings, and any cues about the company’s expanding suite of AI features and their impact on upgrades or advertising revenue are likely to be major highlights.
SPOT Stock: Retail Stance
On Stocktwits, retail sentiment around SPOT stock was ‘extremely bullish’ at the time of writing.
One user said, “$SPOT why do I feel like this will pump in the morning.”
Another user said, “$SPOT bullish for er tmrw.”
A third user noted, “$SPOT will never sell.. this will do a mean reversion to $680.. and the bears will help in how fast we get there.”
SPOT stock is down more than 15% in 2026.
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