New York, Jan 14, 2026, 12:57 EST — Regular session
- Shares of Spotify dropped roughly 2.5% after Bernstein lowered its price target, pointing to an AI-driven product cycle as the reason.
- Wells Fargo cut its target, citing timing risks linked to new offerings and pricing
- Investors are eyeing Feb. 10 results for clearer insight into 2026 margins and pricing
Shares of Spotify Technology S.A. dropped 2.5% to $521.28 in early afternoon trading Wednesday, deepening a recent slide after Bernstein lowered its price target for the music-streaming giant. The Invesco QQQ Trust, an ETF tracking the Nasdaq-100, slipped roughly 1.7%.
Spotify’s new leadership is pushing the idea that artificial intelligence can boost listener engagement without draining resources. “AI isn’t about automation … it’s about agency,” co-CEOs Alex Norström and Gustav Söderström said, highlighting tools like Prompted Playlist, DJ requests, and Mixing. (Spotify)
Spotify, set to release its quarterly earnings on Feb. 10, will draw attention not just for the top-line figures but for any updates on pricing strategy and the margin outlook through 2026. Investors want to see how the company plans to stay profitable amid increasing costs. (Zacks)
Bernstein analyst Ian Moore lowered his price target to $650 from $830 but maintained an Outperform rating, signaling a buy. He noted that “competitive lean-forward AI features” offer the “cleanest path” to relieve valuation pressure amid rising startup competition. Moore also dismissed the “sympathy trade” with Netflix as “unwarranted.”
Wells Fargo analyst Steven Cahall lowered his price target to $710 from $750 but maintained an Overweight rating, signaling a buy stance. He noted that “a U.S. price increase … could kickstart the shares” if management couples it with more optimistic comments on 2026 margins, though he flagged risks around new offerings slipping behind expectations.
Bernstein highlighted an “AI investment cycle” that may pressure Spotify’s short-term profits and trimmed its forecast for ad-supported revenue growth, according to Investing.com. While ads remain a smaller slice than subscriptions at Spotify, investors keep a close watch on them since a bigger ad share could boost margins down the line. (Investing)
The stock has been on a downward trend over several sessions, falling back from its $567.50 peak on Jan. 8 as investors soured on high-multiple growth stocks. (Investing)
Founder Daniel Ek stepped down as CEO on Jan. 1, moving into the role of executive chairman, according to an SEC filing. Meanwhile, Norström and Söderström were elevated to co-CEOs. This leadership shuffle has investors on edge for signs of increased spending or delayed returns linked to new product launches.
The downside is clear: AI features might fail to boost retention or pricing power, while development expenses climb. Add a dip in ad demand, and Spotify could find itself caught between rising costs and investor pressure on profits.
Investors will zero in on Feb. 10, pressing management about when U.S. price changes might roll out, updates on newer formats, and if margins can keep growing through 2026.
