Spotify $SPOT ( ▲ 2.92% ) climbed about 3% Friday after Goldman Sachs upgraded the stock to Buy from Neutral, even as it lowered its 12-month price target to $700 from $735.
The timing isn’t random. The call comes right before Spotify’s already-announced US subscription price hike next month, which will be its third price increase since 2023.
Goldman: AI Fear Is Overdone
Goldman said they’re surprised by how negative investor sentiment has gotten around Spotify because of the “AI theme.” Instead, they see Spotify as one of the platforms that could actually benefit from rising generative AI adoption, not get destroyed by it.
That said, they’re still watching one key threat: whether AI-generated music platforms mess with Spotify’s core royalty structure and economics over time.
Gen Z Is Already Listening to AI Music
The AI-music shift isn’t theoretical anymore. Earlier this month, Morgan Stanley published a survey showing up to 60% of Gen Z respondents already listen to AI music, averaging three hours per week.
And the backlash is starting too: Bandcamp announced last week it would ban AI music from its platform.
Spotify’s basically caught between two forces:
more AI content coming into the music ecosystem, and louder pressure from creators/platforms trying to block it.