The market has been treading through rough waters in 2025, but several stocks in the entertainment industry are among the stars shining the brightest despite this. While many sectors have struggled to gain traction amid economic uncertainty and mixed earnings results, a select group of entertainment names has managed to stand out. The communications sector these stocks are a part of has performed admirably, with a return of around 1% on the year.
However, that return pales in comparison to the names discussed below. These companies have not only weathered the volatility but also delivered strong gains that suggest continued investor confidence. This analysis will detail three entertainment names that are levitating above the market and look at where they could go next. All data uses information as of the May 6 close.
Roblox: Massive April Rebound Puts 2025 Return North of 20%
[content-module:CompanyOverview|NYSE: RBLX]Starting off with one of the hottest gaming stocks of the last several years, Roblox (NYSE: RBLX) has done well for itself so far in 2025. The stock has provided a total return of approximately 22% on the year.
This comes even though shares got absolutely crushed after the firm’s Q4 2024 earnings release, dropping 11% in one day, which began a prolonged fall that saw shares nearly hit the $50 mark. However, the stock has rebounded significantly, up 21% since the end of March.
The stock’s solid Q1 earnings report helped this recovery. The company saw its daily active users rise by 26%, and the number of hours users spent engaged on the platform rose 30%. Profitability also greatly increased, with the company narrowing its loss per share by around 26%.
Looking forward, Roblox is pursuing key growth and profitability drivers such as increasing ad monetization and further international expansion. However, Roblox trades at a highly elevated forward price-to-free cash flow (P/FCF) ratio of around 56. Despite this, analysts still see a moderate amount of bullishness in Roblox. Price target updates tracked by MarketBeat post May 1 earnings indicate over 8% upside in shares.
[content-module:TradingView|NYSE: RBLX]Spotify: First Year of Profitability, First Place in 2025 Communications Returns
[content-module:CompanyOverview|NYSE: SPOT]The most extraordinary standout of this group in 2025 is undoubtedly Spotify Technology (NYSE: SPOT). The stock's total return this year is about 41%, the highest among all large-cap communications stocks globally.
Spotify got off to an exceptionally good start in 2025 during a relatively quiet January, when shares rose nearly 23%. Capping off its fantastic January was its Q4 2024 earnings report on Feb. 4, which sent shares skyrocketing.
Shares rose over 13% after the results, and for good reason. Spotify, the dominant player in music streaming, posted its first full year of profitability with these results. The company’s cost-cutting measures, combined with price increases, were key drivers that led to this big achievement.
Admittedly, the company’s forward price-to-earnings (P/E) ratio is very high at around 57. However, when it comes to expected free cash flow generation, the numbers don’t look nearly as lofty. The company’s forward P/FCF ratio sits at around 38. Believe it or not, this is near the bottom of the company’s range on this figure since it went public back in 2018. The company’s Q1 earnings weren’t as impressive, but it was still profitable and now has 678 million monthly active users.
Analysts may be suggesting that Spotify's valuation is becoming somewhat stretched. However, price target updates tracked by MarketBeat after Q1 earnings indicate an upside of 3% compared to the May 6 closing price. Still, 21 out of 29 analysts rate the stock a Buy.
[content-module:TradingView|NYSE: SPOT]Tencent Music: The Spotify of China, Trading at a Fraction of Its Valuation
[content-module:CompanyOverview|NYSE: TME]Tencent Music Entertainment Group (NYSE: TME) operates in the same industry but in a different geography than Spotify. The company operates the largest music streaming service in China and has seen its shares defy the status quo of the general market.
The stock’s strong performance of approximately 28% in 2025 largely comes from its fantastic earnings released in mid-March. Shares exploded upward by nearly 16% as the firm grew revenues by 8%.
The company’s revenue from music subscriptions, a key growth driver, increased by 18%.
However, in line with Spotify, the real win came in profitability. The company’s adjusted operating margin increased by about 740 basis points from last year, helping adjusted earnings per share (EPS) jump by a whopping 47%.
With a market capitalization that is less than a fifth of Spotify’s, this company may represent the higher upside play in music streaming. The company’s forward P/FCF ratio is about half that of Spotify at 19. A post-earnings price target update from Mizuho indicates upside in TME shares of around 18%.
[content-module:TradingView|NYSE: TME]Where Should You Invest $1,000 Right Now?
Before you make your next trade, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.
Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.
They believe these five stocks are the five best companies for investors to buy now...
