Alexa, play “Celebration.”

Spotify shares soared over 11% after the company reported third-quarter earnings and upped its profit forecasts. While it wasn’t a perfect quarter, investors are buying into Spotify’s AI-driven vision for its future and betting that it will continue to run circles around its music streaming competitors.

• Third-quarter revenue rose 19% year over year to $4.2 billion, just missing analyst forecasts.
• Earnings per share of $1.54 were below expectations of $1.82.
• The key Monthly Active Users metric (MAU) jumped 11% to 640 million, just beating expectations of 639 million.
• Spotify Premium membership rose 12% year over year, reaching 252 million.
• Spotify expects operating income for the fourth quarter to hit $508.6 million, beating previous estimates of $457.5 million.

The firm’s laser focus on profitability has transformed a popular app into solid profits, according to analysts. Spotify has implemented a number of money-making strategies, including cutting its headcount more than 29% since 2022 and raising prices.

And like pretty much every company these days, part of its play to stay relevant is using more and more AI.

“Strategically, Spotify continues to innovate, and we believe extend its lead in audio streaming - while also looking beyond audio,” wrote Morgan Stanley equity analyst Ben Swinburne in a note today, reiterating his “overweight” rating on the stock. “Meaningful enhancements include AI DJ and music videos, both of which have lifted engagement,” he added.

Should you tune in?

While the vast majority of analysts have a “buy” rating on Spotify, not everyone is singing along.

Firms like Evercore, KeyBanc, and Benchmark raised their price targets on the stock today, but one dissenter was PhillipCapital analyst Jonathan Woo, who downgraded the stock from a “buy” rating to “accumulate.”

Spotify shares have more than doubled this year, and Woo is worried that its valuation is too stretched to make it a solid “buy.” But he still sees some upside—in fact, he actually raised his price target 15%.

Alexa, play “Don’t Stop Believing."—LB

🟢 What’s up

• EV startup Rivian popped 13.71% after announcing a new $5.8 billion joint venture with Volkswagen to collaborate on a new line of vehicles that will begin rolling off the assembly line in 2027.
• Rocket Lab…rocketed 28.44% to a new all-time high after increasing revenue 55% last quarter and announcing the first launch deal for its new Neutron rocket.
• Charter Communications will purchase Liberty Broadband in an all-stock deal. Charter shares rose 3.63% on the news, while Liberty shares sank 5.05%.
• Cava reported strong earnings today, including impressive same-store sales growth of 18%. Shares soared on the open, though ended the day up just 1.57%.
• Flutter Entertainment, parent company of sports betting app FanDuel, rose 6.89% to hit an all-time high thanks to incredibly strong betting on the NFL last quarter.

What’s down

• The problems continue at Super Micro Computer, which announced it will need EVEN MORE time to submit its quarterly 10-Q form to the SEC. That’s on top of the delayed filing of its annual 10-K filing from back in June—and if it doesn’t file that by November 16, the stock will be delisted from the Nasdaq. Shares sank 6.31%.
• Spirit Airlines really may go bankrupt this time. The beleaguered airline has lost hope of merging with Frontier Airlines, so shares plunged 59.32%.
• Maplebear, which is the parent company of Instacart, delivered bad news for shareholders: Next quarter will be worse than expected. Shares fell 11.01%.
• SoundHound AI reported record revenue last quarter, but shares plummeted 17.06% after the voice recognition stock also revealed much lower margins.

Just in case the S&P 500’s 50 new all-time highs this year weren’t enough, let’s make it clear: We’re knee-deep in the expansion phase of the bull market.

The post-election rally has accelerated what was already a great year for risk assets like stocks—in fact, it’s the best year for the S&P 500 since 1995. And don’t even get us started on crypto’s gains year to date.

That begs the question: Is it too late to invest? All these gains may make you feel like you’ve missed the boat, and no one wants to buy in at the top.

As the tweet above illustrates, history says you can still get in on the action. Sam Ro of TKer (a fantastic newsletter in its own right) pointed out that good times beget good times. Between 1957 and 2024, the S&P 500 hit another new all-time high one year after it hit a new all-time high 99% of the time. And if that’s too long a wait for you, it reaches a new all-time high just one month later 92% of the time.

PSA: Crypto bros all over the world are feeling more emboldened than ever to give you unsolicited financial advice. Beware.

But they’re ecstatic for good reason—bitcoin has reached record highs on the heels of Donald Trump’s re-election, rising 17.41% just over the past week.

The mania has extended to other cryptocurrencies, and even stocks, too. Ethereum jumped 7.14% over the past week, while stocks like MicroStrategy and Coinbase are up 27.96% and 16.09%, respectively.

How to play the moment

It’s a tale as old as time: Bitcoin ascends to new heights yet again, and the grifts, Ponzi schemes, and legally sound but just plain terrible investment ideas come pouring in afterward.

But if you don’t want to pay somewhere in the neighborhood of $91,736 for one whole bitcoin, there are plenty of ways to celebrate crypto summer without handing your money over to someone on the Forbes 30 under 30 to prison pipeline.

Spot bitcoin ETFs are some of the biggest beneficiaries of the latest bitcoin craze. Less than a year old, these investment vehicles have ballooned in assets after their approval by the SEC in January. The largest spot bitcoin ETF, BlackRock’s $41 billion iShares Bitcoin Trust, just surpassed the nearly 20-year-old iShares Gold Trust in assets.

While these funds do indeed track physical bitcoin (and now spot ethereum, too), they’re overseen by the SEC and backed by Wall Street veterans like BlackRock, Franklin Templeton, and Fidelity, making them blue-chip regulated investment vehicles.

There are also an array of ETFs that offer exposure to the broader crypto industry without tracking spot tokens, such as the Bitwise Crypto Industry Innovators ETF and the Schwab Crypto Thematic ETF.

Cryptocurrency stocks are also a strategic way to play the digital asset boom, especially given that Trump has vowed to make the US the center of bitcoin mining. Popular bitcoin mining picks include CleanSpark, TeraWulf, and Core Scientific, according to CNBC.

The big picture: While regulated investment vehicles such as ETFs and stocks can protect you from scams or imploding startups, cryptocurrency is an inherently volatile asset, no matter how you’re exposed to it. That’s why financial advisors generally say to only invest a maximum 5% of your portfolio in so-called digital gold.

So when your cousin’s boyfriend tries to sell you on Dogecoin at Thanksgiving this year, tell him you already have digital assets covered.—LB

• Buy Now, Pay Later apps are gaining popularity, which is why Klarna has decided to go public.
• Dish and DirecTV may not be merging after Dish bondholders rejected DirecTV’s offer, leaving the deal in jeopardy.
• Donald Trump isn’t selling his shares of Trump Media & Technology Group—but here are all the insiders who are getting out.
• AMD is cutting 4% of its workforce to better focus on, what else, AI.
• Tariffs are the talk of the town at the moment, but immigration, and its effect on the economy, may soon grab the spotlight.
• Home prices in areas at greater risk from climate change (flooding, fires, etc) are rising more slowly than those in less risky areas, according to JPMorgan.

Tomorrow brings the usual initial jobless claims report, the weekly reminder that the labor market is still an important component of the Federal Reserve’s rate-cutting plan. Then again, disruptions from hurricanes and labor disputes that pushed unemployment claims higher last month will probably still be felt in this report, so even if the numbers are worse than expected it shouldn’t be enough to make Jerome Powell pump the brakes.

We’ve also got the Producer Price Index, or PPI. While CPI measures inflation at the consumer level, PPI measures it for manufacturers—an industry that has struggled under the weight of higher inflation and higher interest rates for months now. Wholesale inflation was flat last month, which hopefully indicates a turnaround is on the horizon.

Before the open

• Disney (DIS) is…struggling? That can’t be right, one of the world’s strongest and most beloved brands doesn’t struggle. Unless, of course, box office revenue has been iffy, theme parks have been closed due to hurricanes, streaming shows haven’t been as successful as hoped, streaming subscriber count hasn’t grown quickly, the rights to sports broadcasts have gotten insanely expensive, and there’s still no successor to CEO Bob Iger in sight. Then, yeah, we could see Disney struggling. Consensus: $1.10 EPS, $22.36 billion in revenue.

After the close

• Post Holdings (POST) makes all your favorite snacks, from Bob Evans to Raisin Bran. Tried and true may be the name of the game on the snack foods aisle, but Post hasn’t just stuck with what works. Management has become aggressively acquisitive over the last few years, and sales have soared as a result. Higher food prices thanks to inflation have bolstered the bottom line, making this comfort food company a comfortable addition to most portfolios. Consensus: $1.23 EPS, $1.96 billion in revenue.