Spotify Technology is the IBD Stock Of The Day as the music streaming leader hovers in a buy zone following its recent breakout.
Spotify stock broke out of a double-bottom base at a buy point of 621.20 on May 2, according to IBD MarketSurge. It had flirted with the buy point ahead of its first-quarter earnings report on April 29, but didn't close above it.
The Stockholm-based company reported more subscribers than expected in the first quarter but missed views on earnings and revenue. Spotify stock fell 3.5% the day of its first-quarter report.
The audio entertainment firm added 5 million premium subscribers in the March quarter, ending the period with 268 million subscribers worldwide. Analysts had expected Spotify to add 2 million subscribers.
Spotify also tallied 678 million monthly active users in the first quarter, just shy of Wall Street's target of 679 million. Spotify offers an ad-supported service in addition to its commercial-free subscription service.
The company earned the equivalent of $1.16 a share on revenue of $4.53 billion in the March quarter. Analysts polled by FactSet had expected Spotify to earn $2.49 a share on sales of $4.77 billion. On a year-over-year basis, Spotify earnings rose 11% while sales increased 15%. Spotify reports results in euros.
Spotify Stock Jumps On Apple App Store Ruling
Spotify stock surged into the 5% buy zone on a court ruling that allows developers to bypass Apple's App Store for in-app purchases. Apple charges developers a 30% commission fee for purchases within the App Store.
The 5% buy zone for Spotify extends to 652.26, based on IBD trading principles.
On the stock market today, Spotify stock dipped a fraction to close at 620.07. Shares have pulled back recently as investors shifted away from tariff "safe haven" plays.
Still, Spotify stock has found support at its 21-day exponential moving average.
On Tuesday, Spotify announced enhancements to its AI DJ feature. The DJ uses artificial intelligence to select music to play for you based on your music tastes. The DJ now takes requests using voice commands. The new feature is available in English to subscribers in more than 60 markets where DJ is available.
Spotify stock is on the IBD Tech Leaders list.
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