Stock Analysis: Streaming Company Drops 18% in July – Buy, Sell, or Hold for the Rest of 2025?

Spotify, the leading platform for audio music streamers, experienced an 18% drop in its stock value in July after reporting lower-than-expected revenue and earnings for the second quarter of 2025. Despite this setback, the company has made significant strides in innovation, particularly in the realm of artificial intelligence (AI). Features like AI DJ, which creates custom playlists for users based on their preferences, and AI Playlist, which generates playlists based on user prompts, showcase Spotify’s commitment to enhancing user experience.

Additionally, Spotify has become a major player in the world of audio podcasts, with a push towards video podcasts driving increased user engagement. While the recent financial results for Q2 were below expectations, with advertising revenue seeing a slight decline, Spotify remains optimistic about future growth prospects.

For investors, the recent dip in Spotify’s stock price may present an opportunity for those looking to invest for the long term. Despite the current valuation being on the higher side, there is potential for significant growth in the coming years. CEO Daniel Ek predicts that Spotify could reach $100 billion in annual revenue by 2032, presenting a substantial upside potential for the stock over the next seven years.

While short-term investors may want to exercise caution, long-term investors could benefit from buying the recent dip in Spotify’s stock price. The company’s strong track record of success and ongoing innovations make it a compelling investment opportunity for those willing to hold onto the stock for an extended period.

Ultimately, whether Spotify is a buy, sell, or hold depends on individual investment goals and risk tolerance. For those interested in exploring investment opportunities in streaming entertainment, it may be worth considering Spotify’s long-term growth prospects and innovative strategies in the music streaming industry.