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How much additional revenue will Spotify generate thanks to its latest U.S. price increases? As soft SPOT targets continue to surface, analysts are weighing in with growth estimates.
We covered Spotify’s stateside price bumps soon after their announcement yesterday morning. And while logic suggested that the increases would drive a share-price spike, that wasn’t the case out of the gate.
Furthermore, a Spotify stock (NYSE: SPOT) ascent hasn’t materialized in the interim, either. When trading wrapped today, SPOT finished at roughly $505, down slightly from Friday’s open, closer to 6% on the week, and approximately 12% from 2026’s beginning.
Evidently, then, a major disconnect exists between the anticipated post-increases resurgence – forecasts tied to massive targets had specifically mentioned pricing hikes – and reality.
Regarding a top-level explanation, there’s the possibility that analysts became overenthusiastic when assessing SPOT’s path forward. We’ve seen this in the past: Half a decade ago, many were predicting a steady valuation climb for Spotify stock, which had already risen significantly but would go on to plummet by about 75%.
Perhaps there are parallels between that episode and the current series of events. Technically, present slide aside, SPOT is up 3% from mid-January 2025 and 160% from mid-January 2024. The latter percentage is, of course, a decidedly healthy two-year return.
While there’s a small chance indeed of analysts’ directly explaining their dramatic target retreats, new breakdowns are providing a bit of helpful context. First, Citi recently noted that some investors had been banking on larger U.S. price increases.
Though even bigger raises would have seemingly priced Spotify out of the market – the gap between its monthly charges and those of Apple Music is wide enough as-is – the point is worth keeping in mind.
So are the initially highlighted estimates of the price increases’ revenue and ARPU effects. In the view of UBS, which is maintaining an $800 SPOT target, the upward adjustments could equate “to a blended U.S. ARPU uplift of ~10% and ~3.5% to total company premium ARPU growth.”
Given the percentages associated with the U.S. increases themselves, the prediction isn’t exactly groundbreaking. But it’s interesting from the perspective of possible churn (or the lack thereof) and when it comes to the broader expectation of regular pricing recalibrations from here on out.
Plus, with superfan offerings in the cards, UBS touched on forthcoming “additional monetization efforts/tiers as the service expands with new features/products/AI tools in time.”
Next, Evercore’s Mark Mahaney mentioned the potential for a 4-5% boost in Spotify sales despite the U.S. increases – with an ultimate $270 million gross profit contribution and somewhere in the ballpark of $978 million in fresh revenue through three fiscal 2026 quarters.
Will SPOT surge if the full-year revenue jump comes to fruition? That remains to be seen, but the stock’s newest targets ($700 from Barclays and $760 from Benchmark) still reflect high hopes for 2026 growth.
