Top Growth and Defensive Stocks: Discover the “Netflix of Music”

Spotify, often referred to as the Netflix of music, is making waves as a dominant, defensive, and rapidly growing company. In fact, Spotify has been a standout performer on the market, with a return of over 34% year-to-date, making it the top performer out of 20 communication sector stocks with a market capitalization of $10 billion or more. Over the past year, Spotify has seen impressive growth, up 108%, following closely behind Reddit at 153%.

Interestingly, Spotify’s journey seems to mirror that of Netflix, as both companies have experienced significant growth since their respective public offerings. Spotify, which went public in April of 2018, has more than quadrupled in value over its first 1,780 days, much like Netflix did in its early days. Despite their differences in size, with Netflix being over double the market capitalization of Spotify, both companies have shown resilience with single-digit drawdowns over the past three years, even during challenging times like the market downturn in 2022.

What sets Spotify apart this year is its defensive stance in a sector typically driven by momentum. While many stocks are struggling to recover, Spotify is only 5% below its all-time high, showcasing its strength and stability. Even in the face of challenges like slightly underperforming earnings and revenue expectations, Spotify CEO Daniel Ek remains optimistic about the company’s future, highlighting strong engagement and retention rates among users.

In terms of market positioning, Spotify is a frontrunner in the music streaming industry, commanding approximately 31.7% of the global market share as of early 2025. With a user base of over 615 million monthly active users, Spotify is well-positioned to capitalize on ad revenue and potentially increase profitability in the coming years, similar to the trajectory seen with Netflix.

For investors looking at Spotify, it’s essential to consider key levels and trends. Traders may track the post-earnings low of $540 per share as a pivot point, while long-term investors may find the 50-week moving average a useful indicator to gauge the stock’s performance over time. As long as Spotify maintains its upward trend, it remains a promising investment opportunity in the streaming entertainment landscape.