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Is This Communications and Media Stock a Smart Investment According to Hedge Funds?


Spotify Technology S.A. (NYSE:SPOT) was recently analyzed as part of a list of the 10 Best Communication and Media Stocks to buy, according to hedge funds. The telecommunications industry is facing challenges due to increasing data consumption, especially from video content, which is expected to nearly triple by 2027. Telcos are investing heavily in infrastructure to support emerging technologies like 5G, with costs projected to rise. Telcos are advised to explore growth opportunities in IoT solutions, private 5G networks, and tailored digital infrastructure services to sustain growth.

In the B2C sector, telcos are experiencing high demand due to evolving user preferences driven by video content and data-intensive devices. Data consumption from digitized video content is expected to increase substantially by 2027. Virtual reality is also on the rise, with an anticipated increase in data consumption. Despite technological advancements and competition, the price of data is declining, affecting internet access revenues.

Spotify announced a new premium subscription tier that will offer high-fidelity audio quality and new tools for playlist creation, which could boost revenue for the company. The number of hedge funds holding stakes in Spotify increased in the first quarter of 2024, with GQG Partners being the largest stakeholder. Baron Asset Fund has a positive outlook on Spotify’s growth potential, given its market penetration, improving gross margin profile, and focus on profitability.

Overall, Spotify ranks 3rd on the list of best communication and media stocks to buy. Investors may want to consider AI stocks for potentially higher returns within a shorter timeframe.

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Photo credit finance.yahoo.com

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