BofA analysts said that they see better visibility of continued profit and growth from price increases and new features.
- BofA placed a ‘Buy’ rating and $685 price target on SPOT, which implied a 41% upside.
- Spotify recently unveiled AI-powered music and podcasting features and set upbeat long-term business targets.
- Stocktwits sentiment for SPOT climbed in July and was ‘bullish’ on Monday.
Spotify stock faces a protracted slump, but Bank of America’s analysts believe that could change in the near term.
A range of catalysts, including its new products and pricing tiers for its subscription service, could push the streaming company’s shares out of their weak run, they said. SPOT stock is down 38% from its peak in June last year and 16.3% year to date.
Spotify has “laid out an impressive compelling product roadmap and attractive financial targets, and now the focus will turn to execution,” analysts led by Jessica Reif Ehrlich said in an investor note, according to CNBC.
“We now see even greater clarity for continued profit and [free cash flow] growth including … price increases, new tiers … [and] further penetration of incremental services including podcasting, audiobooks and fitness.”
BofA named Spotify as one of its top picks for the third quarter. The list also includes IBM, Snowflake, Visa and Walmart. BofA placed a ‘Buy’ rating and a $685 price target, which implied a 41% upside from the stock’s closing price on Thursday.
Spotify’s Moves
The Swedish streaming giant has posted stellar results for its first quarter – revenue rose 8% and monthly active users rose 12% – in April, but a soft guidance overshadowed an earnings beat and pushed shares lower at the time.
Since then, the company has focused on doubling down on AI and higher-value subscribers. At its May investor day, Spotify unveiled AI-powered music and podcast features, expanded creator tools and new offerings for “superfans,” while projecting mid-teens annual revenue growth and higher profit margins through 2030.
It also announced a deal with Universal Music, which allows users to create covers and remixes using the voices of artists and songwriters who opt in. The tool will launch as a paid add-on for premium users and offer a new revenue stream for artists, Spotify said at the time.
Spotify Price Hikes
Meanwhile, the streamer has continued raising subscription prices in 2026. The latest increase was announced in January for users in the U.S., Estonia and Latvia. The move followed a broader round of price hikes rolled out across South Asia, the Middle East, Africa, Europe, Latin America and parts of the Asia-Pacific region in the second half of 2025.
Retail, Analyst View On SPOT
July is off to a good start, with SPOT already up nearly 6% so far. On Stocktwits, retail sentiment has climbed higher this month as well and was ‘bullish’ on Monday.
Currently, 34 out of 40 analysts rate the stock ‘Buy’ or higher, and six rate it ‘Hold,’ per Koyfin. Their average price target of $597.60 implies an upside of 23% from the stock’s last close.
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