Spotify set for growth, BofA says, citing new monetization tools

Spotify set for growth, BofA says, citing new monetization tools

Fri, September 18, 2026 at 7:43 PM GMT+3 2 min read

• SPOT -2.22%

Bank of America is standing firmly behind streaming giant Spotify Technology SA (NYSE:SPOT) despite a rough week for the stock.

In a note Friday, the bank reiterated its Buy rating and $685 price target, pushing back against any narrative that the company's growth story is faltering.

BofA analysts called Spotify "a uniquely positioned multi product global platform" with a growing number of products and monetization levers.

The bank pointed to the company's recent investor day, where Spotify laid out a shift in strategy from scaling its user base to monetizing and segmenting its existing market, while noting the company still has "an extremely long runway for subscriber growth."

Analysts highlighted Spotify's expansion beyond its core music subscription business into audiobooks, video podcasts, fitness, ticketing, social features, AI-enabled experiences and deeper personalization.

According to the note, Spotify is moving away from a one-size-fits-all subscription structure toward a more stratified product mix with variable, consumption-based pricing. The company is working to preserve the value of its core Premium tier while giving highly engaged users more ways to spend, through products such as Audiobooks+ and upcoming AI-driven music tools.

BofA said most add-ons are expected to be margin accretive over time, and that the company's long-term financial model doesn't depend on any single new product succeeding at scale.

The bank also said Spotify has established an operating model capable of supporting continued product investment alongside sustainable profit and free cash flow growth. While CY26 operating expenses are elevated, BofA expects that spending growth to moderate, and it sees ample opportunity for capital returns over the intermediate term.

BofA also pointed to five drivers of longer-term profit growth: deeper subscriber penetration, price increases, new pricing tiers, advertising improvement in the second half of 2026, and new businesses.

The bank noted audiobooks have yet to roll out across the large Spanish-speaking population, calling it an untapped opportunity.