Why Spotify Stock Is Surging Today

Spotify Technology S.A. SPOT shares are trading higher Wednesday following the company's investor day presentation.

Spotify provided investors a sense of reassurance during the presentation, highlighting its growth potential and monetization approach, as well as its  differentiation from its competition. The music streaming company largely turned its focus to new product developments. 

"Our expertise in audio personalization is truly unmatched and we have already begun to apply it to podcasts," said Daniel Ek, founder and CEO of Spotify.

Podcasts have hurt the company's gross margins in the short term, but Spotify is confident that the product has 40% to 50% gross margin potential.

"But importantly, we aren’t planning to stop there. We see the opportunity to continue to imagine and explore new verticals across our platform—within audio, but also beyond," Ek said.

The Spotify CEO noted that the company plans to "shoot for the stars" both literally and figuratively. 

"I believe that over the next decade, we will be a company that can generate $100 billion in revenue annually, and that we can achieve a 40% gross margin and a 20% operating margin," Ek concluded.

See Also: Spotify Shares Jump On Analyst Upgrade, Drawing Parallels With Netflix

SPOT Price Action: Spotify shares have traded between $305.60 and $89.03 over a 52-week period.

The stock was up 6.01% at $115.98 at press time, according to data from Benzinga Pro.

Photo: Andrzej Nowak from Pixabay.

Posted In: why it's movingMoversTrading Ideas

Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.

All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.

Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.

Rate collection and criteria: Click here for more information on rate collection and criteria.