Jim Cramer Discussed 18 Companies That Hit $100 Billion in Market Cap in 2024

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2. Spotify Technology S.A. (NYSE:SPOT)

Number of Hedge Fund Holders: 98

Cramer called Spotify Technology S.A.’s (NYSE:SPOT) rise “meteoric” and said:

“Third, no one talks about the meteoric rise of Spotify. The audio subscription company with popular figures like Taylor Swift, the Weekend, Bad Bunny, Chappell Roan, oh and Billie Eilish as well as a host of famous podcasters including the influential Joe Rogan.

Spotify has rallied 165% year to date, joining the hundred billion dollar club as of Friday’s close. Why did it suddenly take off? Simple, the market loves subscription models because they’re sticky. Netflix, Amazon, Costco, all subscription businesses, they’re raving successes and now Spotify is too.”

Spotify (NYSE:SPOT) provides audio streaming subscription services, offering users access to a vast array of music and podcasts. Paying users enjoy an ad-free, unlimited experience, while free users access content with ads on various devices. It has seen consistent growth in premium subscription revenue since its public listing in 2018. In the third quarter, premium revenue grew by 24% year-over-year on a constant-currency basis.

It was largely driven by an increase in subscribers and a rise in average revenue per user (ARPU), which benefited from recent price hikes. The company’s user base also continued to expand, with Monthly Active Users (MAUs) reaching 640 million by the end of the quarter, reflecting an 11% year-over-year increase. Additionally, the number of subscribers grew by 12% year-over-year, totaling 252 million.

For the fourth quarter, Spotify (NYSE:SPOT) expects to reach 260 million premium subscribers, which would represent an increase of 8 million. The company also anticipates that the total number of MAUs will grow to 665 million, marking a net gain of 25 million users from the previous quarter.

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