Spotify (SPOT) Soars in Discussion Despite Q3 Revenue Miss—Is This the Next Breakout Buy?
Spotify Technology S.A. (NYSE: SPOT) is back in the spotlight, and investor chatter is intensifying following its latest quarterly earnings release. The music-streaming giant reported a solid jump in premium subscribers, growing by 17% year-over-year to reach 239 million globally. However, this positive milestone was dampened by revenue and EPS figures that fell short of Wall Street expectations for Q3 2025. Despite the mixed results, retail and institutional sentiment appears divided, sparking a wave of speculation on whether the stock's recent dip presents a golden buying opportunity.
Q3 revenue came in at €3.85 billion, missing analysts’ forecasts of €3.92 billion. Meanwhile, Spotify reported a diluted loss per share of €0.32, a disappointing turn compared to the narrower loss many had anticipated. Still, investors were encouraged by other metrics, such as operating income reaching €32 million, significantly reversing a loss in the same quarter a year ago.
Community speculation across social platforms like X and Reddit is largely centered on two themes: short-term volatility and long-term growth potential. Several users argue that the dip could attract bargain hunters, especially given the platform’s growth in high-margin subscription tiers. Others are more cautious, citing stretched valuations across the tech sector and the increasing competitive pressure from Apple Music (AAPL – NASDAQ), Amazon Music (AMZN – NASDAQ), and YouTube Music, part of Alphabet Inc. (GOOGL – NASDAQ).
Another reason SPOT is trending involves heightened options activity, with traders positioning for short-term rallies. Call volume surged following the earnings release, suggesting speculative plays on a quick rebound. Meanwhile, some analysts have highlighted Spotify's ongoing investments in podcasts and audiobooks as a long-term differentiator that could sustain user engagement and lower churn rates.
But not all sentiment is bullish. Critics point to slowing ad-supported revenue growth and weaker-than-expected average revenue per user (ARPU) metrics as potential red flags. The company’s focus on long-term profitability, rather than near-term earnings, leaves some investors wary—especially in an environment where profitability metrics are once again in focus.
In the broader context, the debate over valuation continues to simmer. Spotify trades at a forward price-to-sales ratio that many still consider rich for a company operating in a highly competitive and low-margin industry. Yet for bulls, the company’s continued user expansion and improving margins present a compelling case for long-term upside.
As SPOT’s price fluctuates post-earnings, traders and investors alike are watching closely to see whether this pullback will mark the start of a new rally—or a deeper correction. Either way, the coming weeks may define the trajectory for one of the most closely watched tech names on Wall Street this season.