What Makes Spotify Expertise S.A. (SPOT) a Lengthy-Time period Holding?

Baron Funds, an funding administration firm, launched its “Baron Targeted Development Fund” third-quarter 2025 investor letter. A replica of the letter could be downloaded right here. The Fund delivered robust leads to the third quarter, appreciating 4.83% (Institutional Shares); nonetheless, the efficiency underperformed the Russell 2500 Development Index’s (the Benchmark) 10.73% achieve. The fund’s underperformance stemmed from considerations over a slowdown in financial progress affecting the fund’s extra economically delicate Client Discretionary shares. Moreover, the rise in aggressive pressures has adversely affected the valuations of some of its holdings. As well as, please test the fund’s high 5 holdings to know its greatest picks in 2025.

In its third-quarter 2025 investor letter, Baron Targeted Development Fund highlighted shares reminiscent of Spotify Expertise S.A. (NYSE:SPOT). Headquartered in Luxembourg Metropolis, Luxembourg, Spotify Expertise S.A. (NYSE:SPOT) gives audio streaming subscription companies. The one-month return of Spotify Expertise S.A. (NYSE:SPOT) was -6.69%, and its shares gained 60.96% of their worth during the last 52 weeks. On October 22, 2025, Spotify Expertise S.A. (NYSE:SPOT) inventory closed at $629.60 per share, with a market capitalization of $129.558 billion.

Baron Targeted Development Fund said the next concerning Spotify Expertise S.A. (NYSE:SPOT) in its third quarter 2025 investor letter:

“Spotify Expertise S.A. (NYSE:SPOT) is a number one international digital music service, providing on-demand audio streaming by way of paid premium subscriptions and an ad-supported mannequin. Shares detracted from efficiency following combined quarterly outcomes and an extended timeline for margin enlargement. This was partly offset by bulletins of worth will increase throughout a number of areas and accomplished negotiations with main report labels. Regardless of latest worth hikes, consumer progress remained robust at a double-digit tempo, with excessive engagement and low churn even amid client uncertainty. The corporate has been on a path to structurally improve gross margins, aided by its high-margin artist promotions market, rising contribution from podcasts, and ongoing investments in promoting. Spotify additionally continued to innovate on the product aspect, calling 2025 the “yr of accelerated execution,” with priorities in bettering promoting, increasing into video, creating a Tremendous Premium tier, and taking extra market share. We proceed to view Spotify as a long-term winner in music streaming with potential to succeed in 1 billion-plus month-to-month lively customers.”

Spotify Expertise S.A. (NYSE:SPOT) is within the twenty fifth place on our checklist of 30 Most Fashionable Shares Amongst Hedge Funds. In response to our database, 111 hedge fund portfolios held Spotify Expertise S.A. (NYSE:SPOT) on the finish of the second quarter, up from 106 within the earlier quarter.  Whereas we acknowledge the potential of Spotify Expertise S.A. (NYSE:SPOT) as an funding, we imagine sure AI shares supply larger upside potential and carry much less draw back threat. In the event you’re on the lookout for a particularly undervalued AI inventory that additionally stands to learn considerably from Trump-era tariffs and the onshoring pattern, see our free report on the greatest short-term AI inventory.

In one other article, we lined Spotify Expertise S.A. (NYSE:SPOT) and shared the checklist of shares with greatest earnings progress for the following 5 years. As well as, please try our hedge fund investor letters Q3 2025 web page for extra investor letters from hedge funds and different main buyers.

READ NEXT: The Greatest and Worst Dow Shares for the Subsequent 12 Months and 10 Unstoppable Shares That Might Double Your Cash.

Disclosure: None. This text is initially revealed at Insider Monkey.