JDP Capital Management, an investment management company, released its “Survivor & Thriver Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The uncertainty surrounding the impact of tariffs on corporate earnings has led to significant volatility in individual stocks in the first quarter. In this environment, the fund was down 2% net to investors compared to a -4.2% return for the S&P 500, including dividends. For more information on the fund’s best picks in 2025, please check its top five holdings.
In its first-quarter 2025 investor letter, JDP Capital Management highlighted stocks such as Spotify Technology S.A. (NYSE:SPOT). Headquartered in Luxembourg City, Luxembourg, Spotify Technology S.A. (NYSE:SPOT) offers audio streaming subscription services. The one-month return of Spotify Technology S.A. (NYSE:SPOT) was 2.44%, and its shares gained 109.93% of their value over the last 52 weeks. On April 22, 2025, Spotify Technology S.A. (NYSE:SPOT) stock closed at $590.39 per share with a market capitalization of $120.857 billion.
JDP Capital Management stated the following regarding Spotify Technology S.A. (NYSE:SPOT) in its Q1 2025 investor letter:
“Spotify Technology S.A. (NYSE:SPOT) – Spotify remains our largest position. In the fourth quarter the company’s free cash flow was up 123% over last year resulting from strong operating leverage that the market had not priced in the valuation. Spotify ended 2024 with 675 million subscribers between paid and ad supported. Spotify and YouTube are the primary beneficiaries of the mega trend shift from linear media to podcasting.
One area of disappointment, and an area for possible concern, is the company’s challenges to grow advertising revenue and profitability. Advetising is an important component to the next leg of the company’s profitability inflection and ability to achieve management’s goal of €20 billion in future operating profit. The market has thus far been willing to ignore lagging advertising revenue because of continued growth in paid subscriptions and ability to sustain price hikes. In 2024 advertising only grew 7% representing about 12% of total revenue. Spotify is still struggling with targeting and performance advertising metrics that can compete with other scaled players like YouTube or Instagram. Although not yet alarming to the investment thesis, the lack of advertising revenue growth is something we are watching closely as the economy softens. The stock was up about 20% in the first quarter.”
A person wearing headphones listening to an audio streaming service.
Spotify Technology S.A. (NYSE:SPOT) is in 25th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 101 hedge fund portfolios held Spotify Technology S.A. (NYSE:SPOT) at the end of the fourth quarter compared to 98 in the third quarter. While we acknowledge the potential of Spotify Technology S.A. (NYSE: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 as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In another article, we covered Spotify Technology S.A. (NYSE:SPOT) and shared the list of stocks that could 10X over the next 2 years. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.