Spotify stock has hit a new all-time high on the New York Stock Exchange this week.
On Friday (January 8), the streaming giant’s stock reached $354.60, and closed at $353.48, up 7% from the closing price the day before and up 12.2% for the week. At Friday’s high, Spotify’s value rose to roughly $66.1 billion.
According to market data company Refinitiv (via Billboard), Spotify’s stock is valued way above what many analysts have assessed it to be worth. The median analyst price target lists the DSP’s stock at $299.46, which is 15.6% below Friday’s high price.
The reason for the increase is not exactly clear, but it could have something to do with Bank of America recently increased its Spotify stock target price from $357-per-share to $428.
Another factor that could have got investors excited about the stock over the past year is the company’s aggressive expansion of its podcast business, most notably with the strong launch for the Joe Rogan Experience podcast.
Billboard states that limited pricing experiments also suggest Spotify might raise prices, expand margins and improve profitability without securing better terms from rights holders.
About a quarter of the week’s gain could simply reflect the New York Stock Exchange composite’s 3.3% gain, while the remainder could stem from a belief that Spotify’s growth-over-profits strategy will finally give way to a growth-with-profits one.
Last month, Radiohead’s Ed O’Brien, Elbow’s Guy Garvey, Nadine Shah and Gomez‘ Tom Gray told MPs that streaming payments are “threatening the future of music.”
MPs are currently examining the economic impact that music streaming is having on artists, record labels and the wider music industry in a new inquiry.
Garvey told the inquiry that whilst the comment “sounds very dramatic,” he went on to tell MPs that “if musicians can’t afford to pay the rent…we haven’t got tomorrow’s music in place.”
Meanwhile, a new app has been developed that judges your taste in music by interrogating your Spotify account.
‘How Bad Is Your Spotify’ has been created by digital publication The Pudding, and mercilessly rips your listening habits to shreds.