We recently compiled a list of the 10 Stocks on Jim Cramer’s Radar. In this article, we are going to take a look at where Spotify Technology S.A. (NYSE:SPOT) stands against the other stocks on Jim Cramer’s radar.
Jim Cramer, the host of Mad Money, recently shared his outlook for Wall Street, focusing on earnings reports. On Friday, he highlighted how the S&P 500 surged toward 6,000 in almost a straight line, a remarkable rally driven by overwhelming buying and a lack of selling. Cramer noted the market’s performance, pointing out that the Dow rose by 260 points, the S&P gained 0.38%, and the Nasdaq advanced 0.09%, with all major indices closing at new record highs.
He described Friday as another impressive session, adding that it marked a historic moment. Cramer reiterated his point, stating:
“This is ladies and gentlemen, a historic move we are witnessing, fueled by an election where voters chose a candidate who is pro-growth, pro-higher stock prices, pro-lower interest rates, and pro-lower taxes… Trump is the most explicitly pro-stock market president in history.”
READ ALSO Jim Cramer Talked About These 16 Stocks and Jim Cramer Says These 10 Stocks Can Do Well Regardless of Who Wins
Cramer went on to say that now that Trump has won, the benefits are clear across many sectors. He cited tech, oil, pharmaceuticals, consumer goods, and financials as prime examples of sectors seeing strong performance. He emphasized that these gains were driven by money managers who feared missing out on the market’s upward trajectory and were unwilling to sell, knowing they might not have enough stocks in their portfolios. Cramer also predicted that we would soon witness a surge in mergers and acquisitions.
“At the same time, we’re about to see a wave of takeovers as the antitrust regulators will stop trying to block every deal under the sun because a new broom is gonna sweep clean.”
Cramer stressed the importance of looking at the market on a sector-by-sector basis. He noted that the tech sector had taken a breather on Friday. In the coming days, he suggested that retailers might surge, followed by financials and then industrials. He described this cycle of sector rotations as part of an “incredibly bullish, virtuous circle” of market gains. While Cramer acknowledged that stocks had performed well under President Biden, he pointed out that Biden didn’t seem to place much importance on the stock market during his tenure.
“For him, it was an abstraction,” Cramer remarked, adding that this stance was changing with the current administration. In conclusion, Cramer made it clear that stocks were about to have a true champion in the White House once again.
“Stocks are about to have a champion in the White House again, even if you might think they aren’t worthy of a presidential supporter. I say get used to it, even though the buying’s started already, because we got a lot more room to run.”
Our Methodology
For this article, we compiled a list of 10 stocks that were discussed by Jim Cramer during the episode of Mad Money on November 8 and listed the stocks in the order that Cramer mentioned them.
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)
Cramer said that Spotify Technology S.A. (NYSE:SPOT) is akin to Netflix and emphasized that the stock is a bargain.
“Spotify reports, and that stock’s up more than 100% for the year because they keep raising numbers beyond even the wildest of analyst projections. And I bet they can do it again. You know why? Because people regard it as a bargain. It’s kind of like Netflix. This is a bargain, bargain bargain.”
Spotify (NYSE:SPOT) offers audio streaming subscription services, providing both ad-free, unlimited access to music and podcasts for paying users, and ad-supported access for free users on various devices. In its third-quarter earnings report, released on November 12, the company highlighted strong growth across multiple key metrics.
Its total revenue reached €4 billion, marking a 19% year-over-year increase. This growth was supported by a rise in operating income, which improved to €454 million. Premium revenue saw a 24% year-over-year increase on a constant-currency basis, driven by ongoing subscriber growth and an acceleration in average revenue per user (ARPU), which benefited from recent price hikes. At the same time, the company’s advertising revenue grew by 7% in currency-neutral terms
Spotify’s (NYSE:SPOT) user base also continued to expand. The company reported an 11% year-over-year increase in Monthly Active Users (MAUs), which reached 640 million by the end of the quarter. Additionally, the number of subscribers grew by 12% year-over-year, reaching 252 million.
During the earnings call, management mentioned that a key part of the company’s growth strategy is its ongoing transformation of the platform, particularly through the development of the Spotify Ad Exchange. This initiative, now being piloted in partnership with Trade Desk, aims to refine the company’s advertising model and diversify revenue streams. Management noted that 2025 would be a year of experimentation and testing for this new advertising approach, with expectations that the impact would be felt in 2026.
Overall SPOT ranks 5th on our list of the stocks on Jim Cramer’s radar. 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.