The audio streaming and media services company Spotify (NYSE:SPOT) announced that it will utilize Alphabet (NASDAQ:GOOGL)-owned Google’s AI (Artificial Intelligence) tools to enhance its platform experience and user base. Also, it marks the extension of the strategic partnership between Google Cloud and Spotify. Google has served as Spotify’s preferred cloud provider since 2016.
Spotify plans to leverage Google AI tools to improve the user experience by examining their listening patterns and offering personalized recommendations. Additionally, the company focuses on integrating LLMs (Large Language Models) into its products to ensure a safer listening environment and detect potentially harmful content.
It’s worth highlighting that Spotify stock has more than doubled year-to-date. This explosive growth reflects the company’s ongoing investments in improving its platform and user experience, which, in turn, drives its monthly active users and financials. Further, the company’s focus on diversifying its earnings base via the expansion of its audiobook business and increased pricing bode well for growth. With this backdrop, let’s look at the Street’s recommendation for Spotify stock.
Is Spotify a Buy, Hold, or Sell?
The company added record MAUs (monthly active users) in the third quarter. Further, it expects to reach more than 600 million MAUs by the end of 2023. Moreover, Spotify remains upbeat and expects to hit one billion global users by 2030.
While Spotify is advancing well with its strategy to boost its user growth, the recent rally in its share price keeps analysts cautiously optimistic about its prospects. With 16 Buy and nine Hold recommendations, SPOT stock has a Moderate Buy consensus rating. Further, the average SPOT stock price target of $188.39 implies an upside potential of 8.39% from current levels.
