Spotify surges to one of its best days ever after announcing upbeat revenue guidance and a new AI remix tool
Spotify announced the deal with UMG at its investor day Thursday.
Spotify notched one of its best trading days ever as investors poured into the stock following updates from the company’s investor day.
At the event, the streamer forecast annual revenue growth in the mid-teens through 2030. For perspective, analysts polled by FactSet are currently predicting 10.6% growth for this year, 14% in 2027, and 12.7% in 2028.
The stock, which was at one point on track for its best day ever in the stock market, finished the day up 13%. That ranks as its fifth-biggest gain ever.
Spotify also announced one of its biggest AI deals to date, revealing that it will partner with Universal Music Group, the world’s largest music company, to launch a new tool that will allow users to prompt AI-generated song covers and remixes into existence.
The tool will be available as a paid add-on to Premium subscriptions and will provide an undisclosed portion of royalties to participating UMG artists.
“What we’re building is grounded in consent, credit, and compensation for the artists and songwriters that take part,” said Spotify co-CEO Alex Norström. Spotify didn’t specify the eventual price of the tool, but did say that the GenAI covers and remixes will be discoverable on the platform and not kept to personal libraries.
The AI remix announcement comes as “resurrection AI” continues to grow, fueling up to seven-figure deals between AI companies and estates representing dead artists. When asked if the works of deceased musicians would be a part of the tool, a Spotify spokesperson told Sherwood News:
“Fans will be able to legally create covers and remixes from only participating artists’ and songwriters’ catalogs, with consent, attribution, and compensation built in from the start.”
In recent weeks, Spotify has launched a handful of AI protections for users and artists (included verified badges) while also expanding its AI offerings for shareholders. Earlier this month, the streamer told Sherwood that it is “still seeing very low levels of interest in primarily prompt generated music.”
