We recently compiled a list of the Billionaire Israel Englander’s Top 10 Stock Picks Heading Into 2025. In this article, we are going to take a look at where Spotify Technology S.A. (NYSE:SPOT) stands against the other stock picks.
Israel Englander has always inspired the investment world by founding and managing the second-most profitable hedge fund in history. The Brooklyn-born billionaire investor began his career on Wall Street in 1970. After gaining valuable experience in trading and investment management, he founded Millennium Management in 1989.
Millennium Management has become one of the world’s largest and most successful hedge funds, managing $210 billion in 13F securities as of Q3 2024. Innovative investment strategies and a focus on risk management are the tenets that have propelled the hedge fund to tremendous success. Since its inception, Englander’s hedge fund has averaged 14% in annual returns, solidifying its position in the highly competitive hedge fund landscape. The hedge fund has also racked up over $56 billion in cumulative profits for investors since its inception.
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Millennium Management had its best year in 2000, when the dot-com bust started, and the S&P 500 was down 10%. Thanks to its multi-strategy approach, it returned 35%, which consistently produces positive returns. As the CEO, Englander only had one down year, a 3% decline at the height of the financial crisis in 2008. The impressive performance stems from the billionaire investor focusing on unique investment strategies emphasizing diversification and risk management. Likewise, Englander advocates for a multi-strategy approach that makes it easy to capitalize on various market opportunities.
Millennium Management’s diversification strategy was highlighted when they sold tech stocks to invest in an index fund, emphasizing long-term growth and risk mitigation. Israel Englander remains focused on expanding the firm and leveraging technology to stay competitive.
In 2023, Israel Englander topped Bloomberg’s list of highest-earning hedge fund managers with $2.8 billion in net earnings. Millennium Management earned $600 million from commodities last year but lagged behind Citadel’s $8 billion in 2022. Bloomberg cited sources saying Millennium’s struggles are due to Englander’s tight control. Financial Times reported Millennium manages $60 billion in assets, employs 5,400 people, and has 17 offices. The fund returned 8.3% in 2023, 12.5% in 2022, 13.6% in 2021, and 25.9% in 2020.
Millennium Management was one of the hedge funds that benefited from the overall stock market rally, with the S&P 500 gaining 24% in 2024 due to optimism around artificial intelligence and interest rate cuts. The hedge fund also benefited from its exposure to many of the ‘Magnificent 7’ stocks, which were behind much of the actions in 2024.
After two straight years of annual gains, the focus in the equity markets is on stocks that can maintain the upward momentum in 2025. Billionaire Israel Englander’s top stock picks are well poised to benefit from a strong US economy. While the billionaire investor’s portfolio consists of tech stocks, it also consists of investment plays in healthcare, industrials and materials sectors. With that, let’s take a look at some of his top stock picks.
Our Methodology
We analyzed Millennium Management’s portfolio to make a list of billionaire Israel Englander’s top 10 stock picks heading into 2025. We then settled on Englander’s top ten holdings and analyzed them to determine why they stand out in generating long-term value. We then ranked these companies in ascending order based on the hedge fund’s stake value.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A person wearing headphones listening to an audio streaming service.
Spotify Technology S.A. (NYSE:SPOT)
Millennium Management’s Stake Value: $1.03 Billion
Number of Hedge Fund Holders: 98
Spotify Technology S.A. (NYSE:SPOT) is a communication services company that provides audio streaming subscription services worldwide. It offers unlimited online and offline streaming access to its catalog of music and podcasts. It was one of the best-performing stocks, gaining 141% in 2024 and emerging as one of billionaire Israel Englander’s top stock picks in 2025.
After the blockbuster gain, one would wonder if there is still room for additional gains. Spotify remains well-positioned to continue edging higher. The upward momentum is being driven by strong underlying fundamentals, including record subscriber numbers of 640 million monthly active users. The numbers include 252 million premium members that pay a monthly subscription. Spotify Technology S.A. (NYSE:SPOT) is also enjoying strong revenue growth and surging profits. It logged $4.2 billion in revenue in the third quarter, which was up 19% year over year. Likewise, it generated a 361% increase in net income which amounted to $316 million.
Spotify’s competitive edge stems from its 31.7% market share in the global music streaming industry, well ahead of Tencent Music with 14.4% market share. Although the content catalogs of all music streaming services are similar, Spotify Technology S.A. (NYSE:SPOT) has set itself apart from the others through technological features, pricing, and the provision of additional content formats, such as podcasts.
Its recommendation engine, driven by artificial intelligence (AI), ensures that every user sees the content that is most pertinent to them. Additionally, AI is being used to develop novel features like AI DJ, which creates customized playlists and adds a voiceover produced by software for commentary while the music is playing.
Overall SPOT ranks 3rd on our list of Billionaire Israel Englander’s top stock picks heading into 2025. While we acknowledge the potential of SPOT as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than the ones mentioned on our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.