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Strong Data Implies That Spotify Stock’s New Uptrend Will Last

What Happened to the Spotify Stock Price Today?

Spotify (SPOT) logo is on the screen of a smartphone with headphones plugged in.

Source: Kaspars Grinvalds / Shutterstock.com

  • Spotify (NYSE:SPOT) stock was pummeled during the growth sector meltdown of February. But shares have since double-bottomed around the $250 level, and Spotify stock is actually up 10% month-to-date in April.

Why It Happened

  • Three strong fundamental trends underlie the recent rebound in Spotify stock.
  • First, the Treasury yield surge that pressured growth stock valuations in February and through the first-half of March has subsided. The 10-Year Treasury yield has been stuck in neutral for about a month now.
  • Second, Spotify’s app download data from AppAnnie continues to come in favorably. Per our analysis, Spotify’s average download rank among U.S. iPhone apps averaged about 25 in January 2021, and has since dropped to about 18 in April.
  • Third, Wall Street is growing bullish on Spotify stock on the sell-off. Over the past two weeks, four different analysts — Evercore ISI, Monness, Stifel Nicolaus, and Truist — all either reiterated or initiated Buy-equivalent ratings on SPOT stock. Each of their price targets implied 20%-plus upside.

Does It Matter?

  • The pause in yields is important. Growth stocks will not sustainably go higher unless yields stop surging. It looks like they are done surging, for now, and therefore, SPOT stock should get some momentum back.
  • Wall Street bullishness is also nice to see. Continued upgrades over the next few weeks and months should help shares move higher.
  • We are most bullish on the strong app download data. This confirms our thesis that Spotify usage will actually rise — not drop — in 2021 as consumers go back to listening to music on work commutes, during gym workouts, and on flights.

Spotify Stock Forecast

  • Recent strong download data confirms that SPOT stock is actually a great reopening play in addition to a strong long-term growth stock. This combination leads us to believing that the newfound uptrend in Spotify stock will persist, both over the next few months and over the next few years.

SPOT stock is a great long-term holding. But it is just one stock of many which we feel represents a new wave of technology disruptors positioned to massively change the way the world plays, eats, travels, and works over the next decade.

The world’s entertainment services are being digitized at a pace that’s accelerating, as globalization and technological convenience converge to create a more tech-centric society.

My top hypergrowth stocks in this megatrend include companies from social media, advertising, streaming and iGaming.

Each of these stocks has the potential to soar 10X and beyond…

Get my complete list of stocks to buy in Digitainment by subscribing to Innovation Investor today.

On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.

By uncovering early investments in hypergrowth industries, Luke Lango puts you on the ground-floor of world-changing megatrends. It’s how his Daily 10X Report has averaged up to a ridiculous 100% return across all recommendations since launching last May. Click here to see how he does it.

Article printed from InvestorPlace Media, https://investorplace.com/hypergrowthinvesting/2021/04/strong-data-implies-that-spotify-stocks-new-uptrend-will-last/.

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