Spotify Technology S.A., together with its subsidiaries, provides audio streaming services worldwide. It operates through two segments, Premium and Ad-Supported. The Premium segment offers unlimited online and offline streaming access to its catalog of music and podcasts without commercial breaks to its subscribers. The Ad-Supported segment provides on-demand online access to its catalog of music and unlimited online access to the catalog of podcasts to its subscribers on their computers, tablets, and compatible mobile devices. The company also offers sales, distribution and marketing, contract research and development, and customer support services. Spotify Technology S.A. was incorporated in 2006 and is based in Luxembourg, Luxembourg.

Spotify Technology S.A.

Сильный индекс, значительно упал. Оптимистичный взгляд на свои позиции резко сменился на неуверенность.

Strong index, significantly down. An optimistic view of his position suddenly changed to uncertainty.

Сильный индекс, значительно упал. Медведи в растерянности.

Strong index, significantly down. The bears are confused.

Сильный индекс, значительно упал. Рынок не поддерживает быков.

Strong index, significantly down. The market does not support the bulls.

Сильный индекс, значительно вырос. Рынок на стороне медведей.

Strong index, significantly up. The market is on the bears' side.

Средний индекс, незначительно вырос. Отток средств из лонгов снизился, но остается значительным.

Medium index, slightly up. The outflow of funds from longs has decreased, but remains significant.

Средний индекс, незначительно упал. Приток средств в шорты снизился, но остается положительным.

Medium index, slightly down. The inflow of funds into shorts has decreased, but remains positive.

Key Points
Nvidia is positioned to capitalize on a multitrillion-dollar AI investment cycle.
Spotify is targeting 1 billion paying subscribers and margin expansion.
ServiceNow is on track to roughly double its subscription revenue by 2030.
If you have some extra cash that you won't need for several years, putting it into growth stocks with durable competitive advantages could pay off. Nvidia (NASDAQ: NVDA) leads in AI computing, Spotify Technology (NYSE: SPOT) in audio streaming, and ServiceNow (NYSE: NOW) in software that runs companies' daily operations. Better yet, all three trade at discounts to their typical valuations. Here's why they're worth buying now.
Nvidia designs the chips and computing systems that power artificial intelligence (AI) data centers. Management expects AI infrastructure spending to reach $3 trillion to $4 trillion a year by the end of the decade. That's industrywide spending, not Nvidia's revenue, but Nvidia can capture a large share of it.
Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
The stock is up about 18% over the past year, slightly ahead of the S&P 500's 13%, as revenue doubled year over year to about $96 billion in the quarter ending July 26, 2026. Management expects revenue to grow about 70% next fiscal year.
That outlook reflects a chip industry experiencing component shortages, including for memory chips. Nvidia's advantage is that it sees both ends of the AI supply chain. At the September Goldman Sachs Communacopia + Technology conference, Nvidia CEO Jensen Huang explained that Nvidia's size and decades-long relationships with trusted suppliers help it lock in what it needs. On the other end, it sells through the big cloud providers, server makers like Dell, newer AI cloud companies, and governments building their own AI.
That reach lets Nvidia track where new data centers are being built and powered around the world, giving it an early read on demand. It also gives Nvidia many paths to customers beyond a handful of tech giants. Nvidia said its non-hyperscaler revenue grew 138% year over year last quarter to $40 billion, almost as large as the $48 billion in revenue from hyperscalers like Microsoft.
Nvidia stock trades at about 23 times this year's consensus earnings estimate -- well below its three-year average of about 32. For a company that analysts expect to grow earnings at a 50% annualized rate, that's a solid value.
Spotify Technology
Spotify's music, podcast, and audiobook service reaches 788 million monthly users, including 306 million paying subscribers. Its 2030 targets call for mid-teens annual revenue growth and an operating margin above 20%, up from 13.5% in the third quarter.
At the September Goldman Sachs conference, co-CEO Gustav Söderström said the longer Spotify operates in a country, the more listeners pay. In Sweden, about half the population pays, and conversion has trended up in other regions. Yet only 3% to 4% of the world pays for a Spotify subscription. Management aims to reach 1 billion monthly users by 2030 and, eventually, 1 billion subscribers.
The stock is down about 15% over the past year after higher spending on AI features and marketing weighed on profit forecasts. Some also fear AI music will lure listeners away, but a recent deal with Universal Music mitigates this risk. The deal allows Spotify to launch AI cover tools for fan-made remixes of their favorite songs, which adds another incentive for users to sign up for a premium subscription.
Spotify stock trades at about 42 times forward earnings estimates, below its three-year average of about 55. That's not too expensive for a company that analysts expect to grow earnings at an annualized rate of 28% over the next several years. That should support superior returns.
ServiceNow
ServiceNow's cloud software helps large organizations run IT help desks and customer service. At its May 2026 investor day, management laid out a base case of over $30 billion in subscription revenue by 2030, roughly double this year's expected total. It's on schedule, with subscription revenue up about 25% year over year in the June-ending quarter.
The stock is down about 17% over the past year amid worries that AI agents will lead to fewer paid employee "seats," or licensed users at businesses. But management said that half of its new business comes from pricing not tied to seats, suggesting the concerns are overblown.
Looking long-term, the main reason to buy the stock is ServiceNow's entrenched position in customers' operations. At the Goldman Sachs conference in September, CEO Bill McDermott said ServiceNow has spent more than 20 years building a contextual map of what goes on inside a company and now runs over 100 billion workflows. Companies that tried building their own AI tools found they cost five to 10 times more than using ServiceNow.
At about 38 times forward earnings estimates, ServiceNow stock trades well below its three-year average of about 48. With analysts expecting about 24% annual earnings growth over the next several years, the stock could outperform the market from here through 2030.
Should you buy stock in Nvidia right now?
Before you buy stock in Nvidia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $355,124!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,296,254!*
Now, it’s worth noting Stock Advisor’s total average return is 901% — a market-crushing outperformance compared to 210% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of October 26, 2026.
John Ballard has positions in Nvidia. The Motley Fool has positions in and recommends Goldman Sachs Group, Microsoft, Nvidia, ServiceNow, and Spotify Technology. The Motley Fool has a disclosure policy.
Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Got $5,000? 3 Growth Stocks to Buy and Hold Through 2030.

Key Points
Spotify reached 306 million premium subscribers in the third quarter.
Spotify is expanding audiobooks to more than 180 global markets.
Ad-supported revenue grew 9% at constant currency in Q3.
On its third quarter of 2026earnings call held on Oct. 22, 2026, Spotify (NYSE:SPOT) announced total revenue reached 5 billion euros, up 14% at constant currency. Free cash flow reached 3.2 billion euros over the past 12 months. Three takeaways from management stand out for long-term investors.
1. Proprietary Taste Models Drive Content Discovery and User Engagement
Investments in artificial intelligence are improving recommendation quality across the platform. Better recommendations keep subscribers engaged longer and strengthen long-term user retention.
Our taste model investments are already paying off. Early deployments show double-digit gains in content discovery, and our users are spending more time in select algorithmic sets.
-- Christian Luiga, Chief Financial Officer
2. Global Audiobook Rollout Expands Subscriber Value and Platform Engagement
Catalog expansion beyond music increases daily platform usage among subscribers. Higher active days improve retention while creating new add-on revenue opportunities.
We have increased our audiobooks listenership by 40%. This is even before launching to the rest of the world. We have seen listening hours grow as well.
-- Alex Norström, Co-Chief Executive Officer
3. Subscriber Base Scaling Shows Multiyear Growth Durability
Consistent annual additions demonstrate broad appeal across developed and emerging markets. A growing base creates a compounding foundation for recurring subscription revenue.
When we went public in 2018, we had 71 million subscribers. Since then, every single year, we've been adding 25 million subs or more. This year, we expect to reach 316 million subscribers.
-- Alex Norström, Co-Chief Executive Officer
Looking Ahead
Revenue momentum accelerates across subscription and advertising channels, supported by lower operating expenses, or OpEx. The platform holds structural advantages in global distribution, proprietary listener taste data, and multi-format audio content, while focusing on margin expansion and capital return.
OpEx growth is now coming down meaningfully, and we expect that moderation to continue into 2027. We see that this year's incremental OpEx is driving multiple benefits to our business.
-- Christian Luiga, Chief Financial Officer
As monetization deepens through add-on features and pricing power, compounding cash flow supports organic investments and share buybacks.
We remain confident in our path and expect another year of progress toward delivering on our 2030 goals. We are well-positioned to continue compounding growth, profitability, and free cash flow.
-- Christian Luiga, Chief Financial Officer
Should you buy stock in Spotify Technology right now?
Before you buy stock in Spotify Technology, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Spotify Technology wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $350,756!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,363,905!*
Now, it’s worth noting Stock Advisor’s total average return is 922% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of October 22, 2026.
The Motley Fool has positions in and recommends Spotify Technology. The Motley Fool has a disclosure policy.
Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Spotify: 3 Key Takeaways for Long-Term Investors

In January 2022, Team Rule Breakers recommended Spotify(NYSE:SPOT) to Stock Advisor members at about $209 a share. By November, with the S&P 500 deep in a bear market, it had fallen to about $69, a drop of roughly two-thirds.
Drops like that are hard to sit through, and with economic headwinds possibly ahead, plenty of investors are wondering how to prepare for the next one. Our answer comes from the philosophy by which every analyst on Team Rule Breakers invests. It starts with accepting that bad years will come, and it ends with a portfolio built to hold through them.
Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
Spotify's story didn't end in November 2022, of course, and we'll come back to it.
Bad Years Are Part of the Deal
Down years are common. Depending on how you count, the market has fallen in somewhere between one year in four and one year in three. Some of those stretches have been brutal, from the dot-com bust to the financial crisis and the COVID-19 crash. Each one also turned out to be a stop on the way to the stock market's long-run gains.
So, at The Motley Fool, we don't try to call the next downturn. Nobody knows whether it will arrive next year or a decade from now, but history suggests it will show up regardless. We spend that energy studying businesses instead. A falling market sometimes offers great companies at better prices, and that's where our attention goes.
Built for the Drops
The Rule Breakers' habits and principles are built with these stretches in mind. The third habit of a Rule Breaker investor -- Invest. For At Least Three Years. -- sets three years as the bare minimum for holding a stock, and we'd happily hold our best companies for decades.
The fifth habit -- 5% Max Initial Position -- helps keep a single stock's fall from doing lasting damage to a portfolio. The sixth principle of a Rule Breakers portfolio -- Review Quarterly, Manage Accordingly -- has us checking in on each business when it reports results so that a rough week in the market doesn't drive our decisions.
Members who held Spotify through 2022 have since watched it recover. As of Friday's close, it's up around 156% since the recommendation, about 71 percentage points ahead of the S&P 500.
Know Your Own Timeline
Not every dollar necessarily belongs in stocks. The Motley Fool has said from the start that money in the market should be money you'd be comfortable leaving there for at least five years. That's the thinking behind the second portfolio principle -- Know and Name Its Purpose. A portfolio meant to fund a house deposit next spring has a different job from one meant to compound for 20 years.
The fourth principle -- Establish Your Sleep Number -- adds a personal limit: how large a single holding can grow before it keeps you up at night. Investors nearer to retirement have fewer years to recover from a bad stretch, so it may make sense for that number to come down over time.
Staying Invested
Chief Rule Breaker David Gardner likes to say the market always goes down faster "than it goes up, but it always goes up more than it goes down, and you have to hold both of those thoughts in your mind."
Both Team Rule Breakers and Team Hidden Gems hold both. We invest with a long horizon, and we plan to stay invested through the bad years because, historically, the good ones have more than made up for them, much as Spotify's recovery has more than made up for its 2022 slide. Fool on!
Should you buy stock in Spotify Technology right now?
Before you buy stock in Spotify Technology, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Spotify Technology wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $380,363!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,315,732!*
Now, it’s worth noting Stock Advisor’s total average return is 919% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of October 19, 2026.
The Rule Breakers Team has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Spotify Technology. The Motley Fool has a disclosure policy.
Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

We Don't Fear Market Corrections. Nor Should You.

Key Points
Once AI can churn out endless songs and videos, the companies that help people choose what to watch and listen to will gain the most.
Two companies stand out as the clearest winners of the surge of AI-generated content.
In creative tools, the software people already use may matter more than whoever builds the best AI model.
Famous characters and classic song catalogs land on the diluted side, because AI is wearing down the walls that made them so valuable.
How We Got Here
On Dec. 11, 2025, Disney (NYSE:DIS) agreed to license more than 200 characters to Sora, OpenAI's AI video app, for three years and to invest $1 billion in OpenAI. On the evening of March 23, 2026, roughly 30 minutes after the two teams finished a working meeting, OpenAI told Disney it was shutting Sora down entirely.
It announced the shutdown publicly the next day. Disney walked away, and no money ever changed hands. We keep coming back to that half-hour because it shows how quickly a big artificial intelligence (AI) partnership can vanish.
Missed AI’s "Act 1"? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn't buy Nvidia in 2005. But according to our analysts, we’re only at the end of "Act 1"—the R&D phase. "Act 2" is the global rollout. Continue »
AI is already cutting production costs. Big-budget productions often spend 20% to 40% of their budgets on visual effects and post-production, and that's the first cost AI cuts. If you've built a career in visual effects, that line item is your paycheck. Netflix (NASDAQ:NFLX) has already used generative AI to make 17 minutes of its docuseries The American Experiment "twice as fast and at half the cost."
In music, the flood has already arrived. At the June peak, more than half of the daily uploads to music-streaming service Deezer, roughly 90,000 tracks a day, were AI-generated. If you're a musician, every new song you release has to compete with that. Listeners, at least, mostly aren't choosing the AI tracks. Fully AI-generated music accounts for just 1% to 3% of streams on Deezer, and Deezer says most of that listening is fraud.
The Assets AI Can't Reproduce
So, who comes out ahead of the AI revolution in the entertainment sector? We'd ask one question of any media company: What does it own or do that becomes more valuable when AI makes content cheap to generate?
A company in the appreciating category owns something that AI abundance makes scarcer relative to demand. That could be a curation layer, which helps people with limited time choose from an endless supply. It could be an ad graph, the user data behind ad targeting, which improves with every bit it collects. Or it could be a workflow already installed on a million desks.
A company in the diluting category is counting on the flood staying contained. It wins only if its brand or pricing power holds up against rivals operating at a fraction of the cost.
Scorecard: Which Assets Appreciate, Which Get Diluted
These are some of the public companies with the most riding on that question.
Appreciating
Netflix (NASDAQ:NFLX) collects its own viewing data on more than 325 million paid memberships. It has disrupted itself three times. In March 2026, it paid $587 million for InterPositive, Ben Affleck's AI filmmaking start-up. A 33% operating margin in the second quarter of 2026 gives Netflix the cash to keep buying its way to the front of every new wave.
Spotify (NYSE:SPOT) has 777 million monthly active users and close to two decades of data on individual tracks. Every track in the daily AI flood makes Spotify's knack for steering listeners toward songs they'll finish a little more valuable. If you've ever skipped song after song hunting for one you actually like, you already know why.
Appreciating With Caveats
Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) owns YouTube, which is forecast by research firm eMarketer to pull in roughly $9 billion of U.S. connected-TV (streaming TV) ad revenue in 2026. It also owns Veo and Gemini's image model, two of the leading AI video and image generators.
That means Alphabet collects on both sides: from the platform where AI content lands and from the tools people use to make it. In September, a federal judge declined to break up Google's adtech business, ordering behavioral fixes and a six-year monitor instead. Google has said it will appeal the underlying ruling.
Meta Platforms (NASDAQ:META) runs the largest AI-optimized social ad graph in the world. In September 2025, it launched Vibes, a feed of AI-generated short videos, on the belief that synthetic video will go mainstream. That's far from certain. If advertisers ever start paying less for AI-made inventory than for human-made content, Meta would feel it most because it distributes more of that content than anyone else.
Adobe (NASDAQ:ADBE) owns Creative Cloud, its suite of design apps that includes Photoshop, and the huge base of customers already working in it. That base matters more now that the top AI image and video generators are roughly interchangeable.
Adobe's annual recurring revenue from AI-first products passed $650 million last quarter, up more than 150% year over year. A new CEO, Anil Chakravarthy, takes over on Dec. 1. The thesis depends on Adobe pressing that distribution advantage faster than the models commoditize.
Walt Disney (NYSE:DIS) owns Mickey Mouse, Marvel, Pixar, and Star Wars, and no AI company can legally copy most of them. Keeping it that way now takes lawyers. Disney sued image generator Midjourney in June 2025, and shortly before signing its OpenAI deal, it sent Google a cease-and-desist letter accusing the tech giant of widespread copyright infringement. That's what counting on the flood staying contained looks like.
Meanwhile, AI is shrinking the edge Disney's budgets used to buy. Few rivals could afford the visual effects that make a Marvel movie look like a Marvel movie, and that's the cost AI cuts first. Disney's first big AI licensing deal died with Sora, which was reportedly burning around $1 million a day, and AI companies losing money that fast make shaky customers. Disney can still win, but only the way the diluting side wins, with a brand strong enough to hold up against rivals operating at a sliver of its cost.
The best reason to own Disney today is its parks, cruise ships, and merchandise business, which together earned more than half of its operating profit last quarter. That's a separate bet from the one this article is about.
Universal Music Group (OTC:UMGNF), Warner Music Group (NASDAQ:WMG), and Sony Music, part of Sony Group (NYSE:SONY), own the catalogs behind most of the songs people stream. In 2024, all three sued AI song generators Suno and Udio, arguing that machine-made tracks would "substantially dilute the royalty pools" paid to artists.
By late 2025, Universal had settled with Udio, and Warner had settled with both. Each settlement came with a licensing deal. So, Suno, one of the companies the labels accused of diluting their business, now trains on licensed label music.
The licensing money is still too small to move the results. Take out Downtown, an artist-services company Universal bought in February 2026, and Universal's second-quarter revenue growth drops from 13% to about 6% in constant currency. The royalty hit from AI is small, too, for now. One big reason is that curators keep AI songs out of listeners' way.
Deezer strips them from its recommendations and playlists, and in a survey Deezer commissioned, 97% of people couldn't tell AI music from human-made music in a blind test. That leaves the labels' protection in the hands of the streaming services. In music, the power is shifting to whoever decides what plays next, and for hundreds of millions of listeners, that's Spotify.
The Bottom Line
Both Netflix and Spotify, the clearest appreciating companies on our list, own curation assets that gain value with every new wave of AI content. Netflix has shown it can reinvent itself three times over. Spotify built the taste engine that other companies' AI floods now need. Disney and the major labels land on the diluted side. Their characters and catalogs still matter, but AI keeps lowering the walls around them, and the licensing money meant to make up the difference is too small or too shaky to count on.
With the cost of generating content heading toward zero, the companies worth owning are the ones sitting on something AI can't reproduce.
Should you buy stock in Walt Disney right now?
Before you buy stock in Walt Disney, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Walt Disney wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $379,123!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,396,103!*
Now, it’s worth noting Stock Advisor’s total average return is 933% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 30, 2026.
This article was created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe, Alphabet, Meta Platforms, Netflix, Spotify Technology, and Walt Disney. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.
Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

As AI Turns Media on Its Head, the Curators Win

Comparing units outstanding versus one week ago at the coverage universe of ETFs at ETF Channel, the biggest inflow was seen in the iShares MSCI ACWI ex US ETF, which added 50,000,000 units, or a 31.0% increase week over week. Among the largest underlying components of ACWX, in morning trading today Spotify Technology is off about 1.4%, and NU Holdings is lower by about 7.6%.
And on a percentage change basis, the ETF with the biggest increase in inflows was the Defiance Daily Target 2X Long NVO ETF, which added 1,040,000 units, for a 39.7% increase in outstanding units.

ACWX, NVOX: Big ETF Inflows

The U.S. economy is in the grip of “funflation,” and consumers are responding by spending more, not less, on the things they love. Evidently, Bank of America card data shows hobby spending jumped 7.9% year over year in August 2026 — more than double the 3.4% growth in transaction volume.
The beneficiaries span consumer discretionary heavyweights like Amazon AMZN to specialized entertainment and music companies riding on the hobby economy wave. As these companies outperform, exchange-traded funds (ETFs) holding them are capturing the upside.
Before identifying these funds, it is crucial to understand what “funflation” means, how it differs from the inflationary environment witnessed during the pandemic, and which stocks are affected by it.
What Is Funflation, and How Is This Cycle Different?
Funflation refers to the rising cost of leisure and entertainment — a phenomenon where consumers absorb higher prices for experiences they value.
What distinguishes this cycle from the post-COVID reopening surge is its durability and its roots in the “hobby economy.”
The 2021-2022 experience economy boom was fueled by pent-up demand after lockdowns.
Today’s funflation is more structural and has transitioned into a steady rise in digital subscriptions, at-home leisure, and localized hobbies as consumers adjust to higher prices they've been seeing for quite some time now.
As a result, sales at sporting goods, hobby, musical instrument, and book stores rose 10.7% in the 12 months through August, outpacing the 6% increase in total U.S. retail and food-services sales over the same period, according to the U.S. Census Bureau’s Advance Monthly Retail Trade Report.
Stocks Riding on the Hobby Economy Wave
The funflation trend is supporting a broad range of companies.
For instance, Live Nation Entertainment LYV, the world’s largest live entertainment company, sits at the intersection of concerts, festivals and premium experiences. It reported solid year-over-year sales growth of 9% in the second quarter of 2026, while its shares have gained 15% over the past six months.
Spotify Technology SPOT has been benefiting from the audio streaming boom driven by music discovery and fandom engagement. Its second-quarter 2026 sales rose 15% year over year, while the stock has rallied 7.4% over the past six months.
In travel and experiences, Expedia Group EXPE and Airbnb ABNB have also been benefiting from the wave of consumers redirecting budgets toward domestic and experience-focused getaways even as international travel costs rise. Expedia generated a 14% year-over-year revenue increase in the second quarter, while Airbnb experienced 17% top-line growth. EXPE has risen 16.6%, while ABNB has surged 27.9% over the past six months.
Traditional consumer discretionary stalwarts also booked in solid revenue growth and share price performance lately. For example, Marriott International MAR, the hotel giant, saw 4.8% revenue growth in the second quarter, while its stock moved up 10.3% over the past six months.
ETFs Riding the Funflation Wave
The recreation index, which includes video and audio, pets and pet services, sporting goods, photography, and recreational reading, rose 2.7% in the 12 months through August (as per the latest Bureau of Labor Statistics' Consumer Price Index data).
That captures the price side of funflation: consumers are paying more for the leisure categories they value and absorbing those costs rather than cutting back. Higher prices on steady volumes mean higher revenues for the companies exposed to these categories — the same names held by the ETFs below.
Against that backdrop, the following ETFs have been rising in the recent past:
Consumer Discretionary Select Sector SPDR Fund XLY
This fund, with assets under management (AUM) worth $21.76 billion, offers exposure to 47 companies in specialty retail; broadline retail; hotels, restaurants and leisure; textiles, apparel and luxury goods; household durables; automobiles; automobile components; distributors; leisure products; and diversified consumer services. AMZN holds the first spot in this fund, with 23.11% weightage, while MAR holds the 10th position with 2.07% weightage.
XLY has gained 4.6% over the past six months and charges 8 basis points (bps) in fees.
MUSQ Global Music Industry Index ETF MUSQ
This fund, with net assets worth $20.8 million, tracks 25 companies with a core business interest in the global music industry. SPOT holds the first position in this fund, with 9.60% weightage, while LYV holds the second position with 8.75% weightage.
MUSQ has rallied 7.5% over the past six months and charges 76 bps in fees.
Invesco Leisure and Entertainment ETF PEJ
This fund, with a market value of $356.1 million, offers exposure to 31 U.S. leisure and entertainment companies that are principally engaged in the design, production or distribution of goods or services in the leisure and entertainment industries. Delta Airlines holds the first position in this fund, with 5.57% weightage, while LYV holds the fourth position with 5.02% weightage. ABNB holds the seventh position in this fund, with 4.53% weightage, while EXPE holds the eighth position with 4.28% weightage.
PEJ has soared 11.4% over the past six months and charges 58 bps in fees.
Amplify Travel Tech ETF AWAY
This fund, with net assets worth $22.7 million, includes 29 technology-focused companies within the global travel and tourism industry. Sabre Corp holds the first position in this fund, with 4.71% weightage, while EXPE holds the sixth position with 4.36% weightage. ABNB holds the eighth position with 4.25% weightage.
AWAY has risen 8.7% over the past six months and charges 75 bps in fees.
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Spotify Technology SPOT saw its second-quarter profitability receive a lift from gross-margin expansion, highlighting economics across its audio platform. Gross margin reached 33.4%, increasing 193 basis points year over year. The improvement reflected gains in the Premium and Ad-Supported businesses, although the underlying drivers differed across the two segments.
Within Premium, revenues grew faster than music costs after accounting for marketplace programs. Lower audiobook and video-podcast costs also supported the segment’s margin performance. Together, these factors indicate that Spotify is generating stronger returns from its subscription business while managing the expenses associated with broadening its content offering.
Spotify Technology Gross Margin (TTM)
The Ad-Supported segment contributed to the profitability improvement. Favorable podcast and tax effects more than offset higher music costs and other costs of revenue. This balance is important because it shows that benefits outside the subscription operation helped strengthen gross profitability despite continuing cost pressure in advertising-supported activities.
Spotify reported operating income of €655 million in the quarter, translating its gross-margin progress into operating profitability. However, expenses increased due to temporary investments in marketing and cloud and artificial intelligence initiatives, excluding social charges. Operating expenses also included €1 million in social charges related to share-based compensation. These investments raised near-term spending but did not prevent the company from delivering substantial operating income.
Overall, the quarter’s central takeaway is that margin expansion remains a key pillar of Spotify’s profitability story. Revenue growth outpacing relevant content costs in Premium, combined with podcast and tax benefits in Ad-Supported, strengthened the company’s earnings structure. At the same time, Spotify continued funding marketing and cloud and AI capabilities. With 7,302 full-time employees worldwide at quarter-end, the company is balancing cost discipline with investment intended to support its platform and operations. The results suggest Spotify’s improving cost-to-revenue relationship, rather than expense restraint, drove the quarter’s profitability advance.
How Do Two Streaming Peers Compare?
Apple AAPL and Amazon AMZN remain peers in audio streaming. Apple benefits from tight integration between its music service and device ecosystem, while Amazon can connect streaming with Prime memberships and smart speakers. Spotify, however, relies more directly on subscriber growth, ARPU gains and advertising execution because audio anchors its business. For investors, Apple represents an ecosystem-led model, whereas Amazon demonstrates the appeal of bundled services. Spotify’s improving monetization indicates that its focused strategy remains competitive.
SPOT, AMZN and AAPL currently carry a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).

Gross-Margin Expansion is a Key Driver of SPOT's Profitability

Key Points
Home Depot maintains a dominant position in the home improvement market with a robust network of over 2,300 stores.
Spotify Technology continues to scale its global streaming footprint, reaching hundreds of millions of monthly active users.
Will you choose the proven brick-and-mortar resilience of a home improvement leader or the rapid digital growth of the world's largest audio platform?
Investors in 2026 face a choice between the steady physical footprint of Home Depot (NYSE:HD) and the digital expansion of Spotify Technology (NYSE:SPOT). Which path offers the better value?
Home Depot remains the dominant player in the home improvement market, while Spotify leads the global audio streaming industry. While one relies on consumer spending in the housing sector, the other thrives on recurring digital subscriptions. Comparing these two reveals how different business models handle the current economic environment.
The case for Home Depot
Home Depot is the world's largest home improvement retailer, serving both individual homeowners and professional contractors. The company is a titan among retail stocks, maintaining its dominance by providing building materials, décor, and tool-rental services. It leverages specialized brands like HD Supply and SRS to cater to professional customers who require high-volume supplies and logistics support.
In FY 2025, revenue reached nearly $164.7 billion, which represented growth of approximately 3.2% compared to the previous year. The company reported net income of close to $14.2 billion for the same period. Its net margin, which shows how much profit a company keeps from every dollar of sales, was roughly 8.6%, reflecting slight compression from prior years.
As of its February 2026 balance sheet, the debt-to-equity ratio was approximately 5.1x. This ratio measures total debt against shareholder equity, with higher numbers indicating more reliance on borrowed funds. The company generated free cash flow of nearly $12.6 billion, which is the cash remaining after paying for operations and equipment, while maintaining a current ratio of roughly 1.1x.
The case for Spotify Technology
Spotify Technology operates a global audio streaming platform that offers music, podcasts, and audiobooks to roughly 777 million users. The company operates in 184 markets, utilizing a freemium model that converts free listeners into paying subscribers. This strategy focuses on data-driven personalization and exclusive content to drive engagement and long-term loyalty across its massive digital ecosystem.
In FY 2025, revenue reached approximately $19.8 billion, representing a growth rate of nearly 9.7%. This growth helped the company achieve net income of close to $2.6 billion, a significant rise from the previous year. The net margin reached roughly 12.9%, illustrating the scaling efficiency of its digital subscription and advertising business models as the user base expands.
Based on its December 2025 balance sheet, the debt-to-equity ratio is roughly 0.3x, indicating a conservative use of debt. The current ratio, which measures the ability to pay short-term debts using short-term assets, stands at approximately 1.7x. Free cash flow for the period was nearly $3.3 billion, providing the capital necessary to reinvest in new technology and international market expansion.
Risk profile comparison
Home Depot faces risks from cybersecurity threats and potential data breaches, which could harm its reputation or lead to financial penalties. The company is currently managing litigation regarding its use of AI-powered surveillance in store parking lots. Furthermore, its performance is sensitive to the housing market and interest rates, which can reduce consumer demand for large-scale home improvement projects.
Spotify Technology operates in a highly competitive landscape against deep-pocketed rivals like Apple and Amazon. These competitors have the ability to bundle music services with other products, potentially putting pressure on the streaming leader. Additionally, the company must negotiate complex licensing agreements with record labels, which creates risks related to its cost of revenue and content availability.
Valuation comparison
Home Depot appears more attractive on a price-to-earnings basis, while Spotify carries a higher premium that reflects its faster revenue growth and lighter capital requirements.
Metric
Home Depot
Spotify Technology
Forward P/E
20.6x
36.7x
P/S ratio
1.9x
5.4x
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?
I'd go with Spotify, which is one of the more interesting growth stories in consumer technology right now. The company is reporting record gross margins and accelerating revenue growth, and its platform continues to find new ways to monetize its enormous user base. Crossing 300 million premium subscribers for the first time is a milestone that signals the business model is working at scale. And AI-driven features are deepening engagement in ways that are starting to show up meaningfully in retention numbers.
Home Depot remains one of the most dependable retailers ever built, with a loyal customer base and a reliable dividend. It has a dominant position in home improvement that competitors have never been able to seriously threaten. But in a sluggish housing market, consumers are pulling back on big-ticket projects, and the company's own outlook depends heavily on factors outside its control.
Spotify is growing faster, expanding its monetization in multiple directions simultaneously, and doing it with margins that keep improving. If you're building a portfolio with a long time horizon, that trajectory is the more attractive place to put your money right now.
Should you buy stock in Home Depot right now?
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Sara Appino has positions in Amazon and Apple. The Motley Fool has positions in and recommends Amazon, Apple, Home Depot, and Spotify Technology. The Motley Fool has a disclosure policy.

Home Depot vs. Spotify Technology: Which Consumer Stock Is a Better Buy in 2026?

Meta Reaches Landmark Lawsuit Settlement
One of the biggest headwinds for Meta Platforms’ (META) stock has been a massive, multi-year bipartisan lawsuit that accused the company of knowingly deploying addictive and harmful product features on its social media platforms. The lawsuit, which included 47 state attorneys general, Washington, D.C., and several U.S. territories, accused Meta of harmful practices that induced addictive behavior, such as algorithmic feeds that drove endless “doom scrolling” and constant push notifications that harmed the mental health of teenagers, children, and young adults.
Because state consumer protection laws allow states to seek civil monetary penalties for each violation, the lawsuit was initially seeking up to a staggering $1.4 trillion. However, in late August, Meta reached a settlement that included algorithm changes, enhanced age verification, and daily screen time caps on Facebook and Instagram for teen accounts. Meta also agreed to an $18 billion payout over ten years. Not only was the settlement far less than initially feared, but investors can also now put this bearish headwind in the rear-view mirror.
Meta Muse has Strong Debut
Meta Muse is Meta’s autonomous personal artificial intelligence agent launched on September 8, 2026. Muse is an agentic AI platform that can perform real-world tasks on the user’s behalf while operating in the background across connected apps. Muse can perform tasks such as online shopping, travel booking, sending emails, and filling out complex forms. Muse can also convert Instagram reels such as recipes into actionable grocery lists. Additionally, Muse integrates with several popular services, including Spotify (SPOT), Google (GOOGL) Gmail, and OpenTable. Wednesday, Meta shares spiked after the company said Muse usage has “blown way past our projections,” with users engaging 10x more than its test cohorts. Muse also reached the top 5 in the App Store in under 24 hours, proving that Meta’s consumer AI push is beginning to bear fruit.
Meta Earnings Growth Returns
In 2025, Meta’s annual earnings growth slowed for the first time in three years. However, Zacks Consensus Estimates suggest a return to annual earnings growth in 2026 and 2027.
Image Source: Zacks Investment Research
Bottom Line
After a successful agentic AI debut and a favorable, high-stakes multi-year legal settlement, Meta Platforms has finally turned the corner. With core regulatory risks now in the rearview mirror and new revenue catalysts taking hold, Meta is well-positioned to restore earnings growth and reinforce its technology leadership role.
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This article originally published on Zacks Investment Research (zacks.com).

3 Reasons Meta Has Turned the Corner

What happened
Shares of Facebook parent Meta Platforms (NASDAQ: FB) rose 3.6% on Monday, after media investment company GroupM released an intriguing growth forecast for the digital advertising market.
So what
Global ad spend excluding political ads will surge 22.5% in 2021 to a staggering $766 billion, according to Brian Wieser, GroupM's global president of business intelligence. That's up from his prior estimate of 19.2%.
Looking further ahead, Wieser sees the industry growing 9.7% in 2022. And by 2025, GroupM projects that the global ad market will expand to a cool $1 trillion.
"The advertising industry is in a ridiculously healthy state at the present time," Wieser told Adweek. "The 23% growth rate we're calling for in 2021 is possibly one of the strongest rates of growth ever for the industry."
Wieser chalked up the gains to the rise of entrepreneurship and the growth of e-commerce. Many new online businesses are focused on driving their sales growth, even if that means sacrificing near-term profitability, according to Wieser.
Now what
GroupM's projections were even better for the digital segment of the ad market. Wieser expects digital ad spend, excluding U.S. political advertising, to soar 30.5% this year and 13.5% in 2022.
GroupM anticipates that digital advertising will comprise nearly two-thirds of the overall ad industry, up from roughly 60% in 2020. And Wieser believes that Meta, along with fellow industry giants Alphabet and Amazon, could capture as much as 90% of that digital ad spending.
So although Facebook may have recently changed its name to Meta Platforms to reflect its new metaverse-focused ambitions, shareholders can take comfort in the knowledge that its core advertising business remains on solid footing.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Joe Tenebruso has the following options: short January 2024 $4,000 puts on Amazon. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, and Meta Platforms, Inc. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool has a disclosure policy.
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