We recently compiled a list of the Jim Cramer Discussed 18 Companies That Hit $100 Billion in Market Cap in 2024. In this article, we are going to take a look at where Spotify Technology S.A. (NYSE:SPOT) stands against the other companies that hit $100 billion in market cap in 2024.
Jim Cramer, the host of Mad Money, recently discussed a number of companies that have surpassed $100 billion in market capitalization this year, noting how these companies seem to reflect the current market mood. According to Cramer, it used to be a significant achievement for a company to reach the $100 billion mark, as most companies would never attain that level of market cap.
READ ALSO 10 Best Jim Cramer Stocks to Buy According to Analysts and Jim Cramer’s Lightning Rounds: 12 Stocks Under the Spotlight
He emphasized the immense effort and determination required to achieve such a feat. However, Cramer pointed out that in today’s market, the $100 billion threshold has lost some of its significance, given the recent surge in stock valuations. He highlighted that, as of the market close last Friday, 18 companies had crossed the $100 billion mark in 2024, a notable increase that speaks to the current market dynamics.
Cramer acknowledged that stocks, like everything else, had to contend with inflation, which remains a persistent issue. He went on to say:
“I know we’re experiencing a heightened market, with expectations really running so hot that you can’t believe that a presidential rally, or, let’s say, an end-of-the-year rally and a stock shortage rally are all in play at once. Many of these stocks got clocked today as part of a sell-off that seemed to infect the year’s best performers. I don’t know how long it’ll last, maybe some great buying opportunities already.”
Cramer concluded that the massive influx of capital into the market is a clear driver behind the rise in companies reaching the $100 billion valuation.
“But bottom line: When you get this much money coming in, you can see how all these companies can reach $100 billion, creating a huge amount of wealth, at least on paper. One more reason why it wouldn’t be so bad if some of the winning investors in this market took something delicious off the table.”
Our Methodology
For this article, we compiled a list of 18 stocks that were discussed by Jim Cramer during the episode of Mad Money on December 9. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
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
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.
Overall SPOT ranks 2nd on our list of the companies that hit $100 billion in market cap in 2024 according to Jim Cramer. While we acknowledge the potential of SPOT as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. 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.
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Disclosure: None. This article is originally published at Insider Monkey.