This Billionaire Just Bought $560 Million of This Brilliant Stock Up Nearly 650% Since 2023

Group 1: Investment Insights - Billionaires like Chase Coleman at Tiger Global Management are making significant investments in well-known stocks, such as Spotify, which has increased by 645% since the beginning of 2023 [2] - Coleman increased his holdings in Spotify from 2,560 shares to 1.26 million shares, valued at approximately $560 million [2] Group 2: User Growth and Revenue Potential - Spotify is the leading audio streaming service with 675 million monthly active users, reflecting a 12% year-over-year growth [3] - Out of the 675 million users, only 263 million are premium subscribers, indicating substantial potential for converting ad-supported users to premium [4] - Premium subscribers, who make up only 39% of total users, generate 87% of Spotify's revenue, highlighting a lucrative market opportunity [4][5] Group 3: Profitability and Financial Projections - Spotify is projected to achieve its first fully profitable year in 2025, with expectations of profitability in every quarter [8] - The operating margin has stabilized around 11%, while gross margins are approximately 30%, which is strong given the costs associated with streaming rights [7] - Wall Street analysts anticipate revenue growth of 16% in 2025 and 15% in 2026, indicating a positive outlook for Spotify's financial performance [6] Group 4: Valuation Considerations - Spotify's stock is currently trading at around 53 times forward earnings, which may appear expensive compared to its expected growth [9] - The valuation is influenced by the growth potential in premium subscribers and the platform's user stickiness, as users are less likely to switch services [10] - Despite the high valuation, there is a compelling investment case for Spotify, as indicated by the interest from major investors like Tiger Global Management [11]