New York, February 12, 2026, 13:24 EST — Regular session
- Spotify shares fell in Thursday trading after a sharp earnings-driven jump earlier in the week.
- Broker notes this week flagged valuation and uncertainty around AI and streaming economics.
- Investors are looking to Spotify’s May 21 Investor Day for fresh detail on strategy and targets.
Spotify Technology S.A. (SPOT) shares fell about 7% on Thursday, giving back part of a two-day-old rally after the company’s upbeat quarterly update. The stock was down 7.3% at $451.47, after swinging between $438.07 and $489.10 in the session.
The pullback landed in a weak tape for tech and software shares, with investors again questioning when big spending on artificial intelligence will translate into returns. Markets were also bracing for U.S. consumer price data due Friday, a potential swing factor for rate expectations. (Reuters)
Spotify’s shares have been volatile since Tuesday, when the music streamer forecast first-quarter operating profit above Wall Street estimates and pointed to solid user growth after price increases, even as revenue growth slowed to its weakest pace since the company listed in 2018. The results were the first under co-CEOs Gustav Söderström and Alex Norström, after founder Daniel Ek moved to executive chairman in January. Söderström told Reuters that Spotify’s AI-powered “Interactive DJ” has more than 98 million paid subscribers using it, adding: “Spammy AI music is not a new problem.” (Reuters)
In a quarterly update filed with U.S. regulators, Spotify said monthly active users (MAUs) — the count of people using the service each month — rose to 751 million in the December quarter, while premium subscribers climbed to 290 million and operating income reached 701 million euros. For the first quarter, it forecast 759 million MAUs, 293 million premium subscribers, revenue of 4.5 billion euros, a gross margin of 32.8% and operating income of 660 million euros. Gross margin is the slice of revenue left after paying for content and other direct costs; the company also highlighted that “social charges” — payroll taxes tied to share-based pay in some countries — can swing with the share price and add noise to quarterly results.
Spotify, in a separate earnings post, leaned into a bigger pitch on product and tech, with Ek calling it “a technology platform for audio” and pointing to “AI, new interfaces, wearables” as the next shift. Norström said the company is framing 2026 as the “Year of Raising Ambition,” while Spotify also flagged work on AI-powered personalization and a partnership that will let users buy physical books through the app via Bookshop.org later this spring. (Spotify)
Cantor Fitzgerald cut its price target on Spotify to $525 from $615 and kept a Neutral rating, citing valuation concerns even after what it called a strong quarter. Analyst Deepak Mathivanan said operating income came in above Street expectations and noted Spotify plans to discuss AI product opportunities in depth at an Investor Day on May 21. (Investing)
Pivotal Research, meanwhile, downgraded Spotify to Hold from Buy and slashed its price target to $420 from $875, warning of “storm clouds brewing” that could hang over the stock through at least 2026. (Investing)
But the setup is still messy. Spotify’s profit story is getting cleaner, yet the market is asking how much of that is timing — price rises, cost control, favourable mix — and how much is durable once competition tightens and the industry digests AI-generated content at scale. Apple and Amazon remain close rivals in streaming, and any stumble in ads or engagement would make the stock’s multiple harder to defend.
A filing showed Spotify furnished its Q4 update in a Form 6-K dated February 10, signed by Chief Financial Officer Christian Luiga. The company also posted an annual report on Form 20-F on the same date.
What investors watch next is May 21. On the earnings call, management told listeners to “please hold the date” for an Investor Day in New York, where the company is expected to lay out more detail on its “raising ambition” theme and where traders will look for clearer targets around growth, margins and AI-driven products. (Fool)
