Spotify Stock Is Down 44%. Should You Buy the Dip or Run for the Hills?
Spotify's stock has plummeted 44% from its peak due to the company's shift in focus from growth to profitability, despite a 12% increase in monthly active users to 761 million in Q1 2026. The company's net income surged 220% to $844 million, driven by revenue growth and cost discipline.
Spotify's stock has dropped 44% from its peak as the company prioritizes profitability over growth. The music streaming platform ended Q1 2026 with 761 million monthly active users, a 12% increase from the year-ago period. Spotify's revenue was $5.3 billion, with 293 million Premium members accounting for 91% of total revenue. The company's net income surged 220% to $844 million due to an 8% increase in revenue and a 4.5% decline in operating expenses. Spotify's investments in AI-powered features, such as Prompted Playlist, aim to boost engagement and convert free users to paying members. The company's stock is now trading at a price-to-earnings ratio of 34.5, slightly above the Nasdaq-100 technology index.
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