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Is Spotify Technology S.A. (SPOT) the Best Kid-friendly Stock to Buy Right Now?

We recently compiled a list of the 10 Best Kid-Friendly Stocks To Buy Right Now. In this article, we are going to take a look at where Spotify Technology S.A. (NYSE:SPOT) stands against the other kid-friendly stocks.

Expert Thinks Value Stocks are Making a Comeback

Investors and analysts alike are concerned about where equities are headed in 2025. On December 23, Eric Beyrich, Sound Income Strategies co-chief investment officer appeared in an interview on Yahoo Finance to share his market thesis for equities in 2025.

Beyrich shared his perspective on the market, emphasizing a possible rotation in 2025. He added that drug and mega-cap tech stocks have previously led the market, but as their growth rates continue to decline, a rotation is probable. He also emphasized that value names, especially those that have underperformed over the past two years, are expected to make a comeback. Adding to this, Beyrich suggested that these value names have comparable relative growth rates and their valuation multiples, more often than not, are a third of that of the market.

READ MORE: 10 Stocks That Will Make You Rich In 2025 and 12 Best Energy Stocks To Invest In Now.

Speaking of the S&P 500, excluding Big Tech, the market has underperformed, and with the growth rate for the big seven declining, the market emphasis will more likely gear towards value names. Beyrich also added that as rates come down, housing inflation is also expected to decline. He suggested that “abject extremes” are going to help value stocks, especially because the S&P 500 has been trading at 25 times its forward earnings. He emphasized that people have been investing in these stocks because they are scarce, and with growth rates declining, the market will shift away from more expensive names.

On the flip side, Beyrich acknowledged that some of the names are great companies with huge cash flows, but they do have a pricing issue. Beyrich also shed light on the nature of valuations, suggesting that they behave like pendulums, going extremes in both directions. Overall, he remains extremely bullish on cheap companies, especially those with solid catalysts for improvement.

Stocks with a sustainable and long-standing business model are often deemed safer and have been a household name for adults as well as kids.

Our Methodology

To come up with the 10 best kid-friendly stocks to buy right now, we went over multiple similar rankings on the internet. We then examined the hedge fund sentiment of each stock and picked the most popular ones. Our list is in ascending order of the number of hedge fund holders as of Q3 2024.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

A person wearing headphones listening to an audio streaming service.

Spotify Technology S.A. (NYSE:SPOT)

Number of Hedge Fund Holders: 98

Spotify Technology S.A. (NYSE:SPOT), an audio streaming company, has grown significantly over the past few years. It allows people to discover music, listen to podcasts, stay on top of celebrity tours, and optimize listening profiles. The app is present in 184 countries and has more than 640 million monthly active users, comprising 252 million premium subscribers. The company grew its monthly active users by 11% year-over-year and revenue by 19% year-over-year to reach EUR 4 billion in the third quarter of 2024.

2024 marked one of the biggest Spotify Wrapped events yet, attracting more users to the audio streaming application. To improve and provide premium customer satisfaction, Spotify Technology S.A. (NYSE:SPOT) is making significant investments in AI. On December 4, the company announced that it made improvements to its AI DJ and AI Playlist, with a new addition; Spotify Wrapped AI Podcast. With these advancements, users can enjoy a more personalized streaming experience, positioning it as a customer favorite. In the third quarter of 2024, Spotify Technology S.A. (NYSE:SPOT) expanded its AI Playlist in beta to six markets, launched comments for podcasts, and expanded music availability to 85 new markets.

Artisan Partners’ Artisan Mid Cap Fund stated the following regarding Spotify Technology S.A. (NYSE:SPOT) in its Q3 2024 investor letter:

“Among our top Q3 contributors were Argenx, Spotify Technology S.A. (NYSE:SPOT) and Exact Sciences. Spotify is a leading global audio streaming franchise with over 600 million monthly active users. We believe its position in the supply chain is solid given a secular trend of fragmentation in the music industry as well as internal product and pricing initiatives. Shares rallied after the company reported strong earnings results, including 20% revenue growth. Importantly, the company’s profit margin is expanding nicely, and we believe it can rise further due to likely price increases, potentially better terms with labels and further cost discipline.”

Overall SPOT ranks 3rd on our list of the best kid-friendly stocks to buy now. While we acknowledge the potential of SPOT as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SPOT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

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In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

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