Spotify stock falls below $650 despite analyst optimism, after a price increase announcement and concerns over declining revenue and potential subscriber losses.
Spotify’s stock price dropped below $650 on August 6, 2025, after initially increasing to $670 following the announcement of price hikes in markets outside North America. The recent quarterly report showed strong user growth but also revealed a decline in average revenue per user (ARPU) for its Premium tier and a return to net loss after a profitable period. Although the company provided a cautious forecast for the third quarter, it moved ahead with the price increases to enhance revenue, which raised concerns about potential subscriber cancellations.
By the end of trading on August 5, Spotify’s stock was at $647, nearly double compared to the same time in 2024. Company leaders have sold large amounts of stock as prices rose. Analysts have mixed views on Spotify’s future. Rosenblatt maintained a neutral rating with a $679 target, while Phillip Securities upgraded its rating but kept a target of $600, suggesting possible declines. Wells Fargo took a more favorable view, highlighting growing subscriber numbers with a target of $750, and Wolfe Research gave an “outperform” rating with an $800 target, acknowledging risks from price hikes.
The varying price estimates, ranging from $600 to $800, reflect uncertainty about Spotify’s finances. Key concerns include profitability, advertising revenue, new product features, and how the price changes might impact subscriber retention and ARPU moving forward.
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