Spotify shares surged following its Investor Day announcement of a partnership with Universal Music Group for AI-generated music.
The agreement allows premium subscribers to create licensed AI covers and remixes. This initiative establishes a new revenue stream for both the platform and participating artists. The move positions Spotify as an industry partner by legally managing AI integration in music.
The company also set a long-term target of mid-teens annual revenue growth. Spotify aims to achieve gross margins between 35% and 40% by 2030.
JPMorgan and Wells Fargo raised their price targets in response to the announcements. The stock climbed significantly as investors reacted to the updated financial outlook and AI strategy.