Spotify shares are experiencing a surge, nearing their highest levels on the New York Stock Exchange, following a positive report from UBS.

As of 11:15 a.m. Wall Street time, the stock has risen by 5%, approaching the previous peak of over $500 recorded in December.

UBS has increased its price target for Spotify from $485 to $540, suggesting a potential upside of 17.7%. The research firm predicts a strong financial performance for Spotify in 2025, with an estimated addition of 23 million new paying subscribers this year, slightly lower than the 24 million added in 2024.

UBS also anticipates further improvement in profit margins and projects free cash flow of three billion euros in 2025, up from two billion euros in the previous year. The firm maintains its buy recommendation on the stock, indicating confidence in Spotify's growth trajectory.