Spotify Launches AI-Driven Custom Playlists to Enhance User Experience
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 22 2026
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Source: CNBC
- AI Feature Launch: Spotify rolled out the 'prompted playlist' feature on Thursday, allowing users to create custom mixes based on feelings or memories, aimed at enhancing user experience and engagement.
- Testing and Rollout: The feature is currently in beta for premium subscribers in the U.S. and Canada, with plans for a full rollout by the end of the month, demonstrating Spotify's responsiveness to user feedback.
- Activity Customization: The new feature allows playlists to be tailored for specific activities, such as a 30-minute 5K run, combining high-energy and relaxing music, further enhancing user personalization.
- Increased AI Investment: Spotify made significant investments in AI research and product development last year in partnership with major music labels like Sony, Universal, and Warner, indicating a long-term strategic focus in the music streaming market.
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Analyst Views on SPOT
Wall Street analysts forecast SPOT stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for SPOT is 750.79 USD with a low forecast of 525.00 USD and a high forecast of 900.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
21 Analyst Rating
15 Buy
6 Hold
0 Sell
Moderate Buy
Current: 508.700
Low
525.00
Averages
750.79
High
900.00
Current: 508.700
Low
525.00
Averages
750.79
High
900.00
About SPOT
Spotify Technology SA a Luxembourg-based company, which offers digital music-streaming services. The Company enables users to discover new releases, which includes the latest singles and albums; playlists, which includes ready-made playlists put together by music fans and experts, and over millions of songs so that users can play their favorites, discover new tracks and build a personalized collection. Its users can either select Spotify Free, which includes only shuffle play or Spotify Premium, which encompasses a range of features, such as shuffle play, advertisement free, unlimited skips, listen offline, play any track and audio. The Company operates through a number of subsidiaries, including Spotify LTD and is present in over 20 countries. Its service offers a music listening experience without commercial breaks.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Spotify Paid Over $11 Billion to Music Industry in 2023
- Historic Payout: In 2023, Spotify paid over $11 billion to the music industry, marking the largest annual payment from a retailer in history, underscoring its significant influence in the music streaming market.
- Support for Independent Artists: Spotify's payouts grew by over 10% in 2025, with independent artists and labels accounting for 50% of all royalties, indicating the company's commitment to diversifying its artist base to enhance platform appeal.
- Revenue-Payout Relationship: Spotify noted that its payments to the music industry represent nearly 70% of its revenue, illustrating a sustainable business model where increased revenues lead to higher music payouts.
- User Growth and Pricing Strategy: As of Q3, Spotify had 713 million monthly active users and recently raised prices for its premium subscription plans in several markets, leveraging its large user base to drive profit growth.
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