3 Subscription Stocks Built to Withstand Market Volatility

Key Points

• Due to their underlying business models, these three businesses could withstand any potential volatility in the broader market.
• Wall Street analysts were surprised by the higher EPS reported this quarter, prompting them to raise targets.
• Institutions like this list, and they've been buying recently.

Today’s market is being threatened by some of the economic data that has been coming out for the United States, which poses a major risk of volatility down the line, from inflation data to housing and employment, investors should be aware of what areas of the market could be set up to mitigate some of these volatile moves as well as provide some upside potential in the coming months.

For that reason, businesses with a subscription-based model could be set to outperform and hold their ground even in a volatile market. This is because their underlying financials are more stable and predictable than the average business in the broader market, making them an easier target for Wall Street analysts and institutional buyers, considering the fundamental safety they offer.

Fitting this subscription setup, three stocks have earned their place in every investor’s watchlist for the coming quarter. Names like Spotify Technology NYSE: SPOT, T-Mobile US Inc. NASDAQ: TMUS, and Netflix Inc. NASDAQ: NFLX are behaving in a way that resembles the behavior of stocks that command preference from the market due to these fundamental reasons and more.

Institutions Like Spotify Stock

Now that Spotify shares have traded up to 93% of their 52-week highs, after a one-year performance of 117% to beat most of its peers and even the broader S&P 500 index, it seems that the company has gained further attention from the market participants, more than just traders and price action.

As far as momentum long-only buyers go, it makes sense for investors to notice some recent buying in Spotify stock due to its breakouts, such as those from State Street Corp, boosting their Spotify holdings by 1.7% as of mid-August 2025. After this new allocation, the group now holds a stake worth $3.5 billion, serving as a vote of confidence for its future.

On a more visceral level, investors can gauge how the market is positioning Spotify stock relative to its peers and industry group, as an outlier valuation provides all the necessary evidence. By trading at a price-to-earnings (P/E) ratio of 177.6x today, Spotify commands a steep premium against the 72.1x industry average.

Most investors will say that this is an overextended stock with lots of downside and pullback potential; however, the savvy ones will remind them that the market is always willing to pay premiums for the stocks that they believe will outperform their peers and the broader market in the coming months. Spotify’s momentum is there to justify that view.

T-Mobile’s Earnings Show Its True Potential

While the entire market expected T-Mobile to report earnings per share (EPS) closer to $2.69 for the most recent quarter (July 2025), the company surprised everyone by beating those expectations with $2.84 in reported earnings, showing how resilient this subscription-based service business can be.

When it comes to business services stocks, few are as powerful as those of wireless providers, as this is an essential area for all consumers and continues to grow in tandem with population growth. There is no going wrong with a stock like T-Mobile, but there are other deeper reasons why this is also the case.

In the company’s latest earnings presentation, investors can see a few drivers that could keep T-Mobile at the top of its game, such as the 1.7 million customer additions during the quarter. This represents a record for T-Mobile in any given quarter and places the company at an industry-leading position.

Unsurprisingly, some Wall Street analysts decided to revise their valuation targets higher on T-Mobile stock as a result. For instance, Benjamin Swinburne from Morgan Stanley has an Overweight rating, with a $285 per share valuation, indicating 12% additional upside beyond the Moderate Buy rating and the $256 target set as the current consensus.

Netflix Could Rally Higher From Here

Even though Netflix stock trades at 92% of its 52-week high level, it's likely to reach new highs in the coming months. According to forecasts, Wall Street analysts now expect to see 23.4% EPS growth in the next 12 months, a figure that is likely not priced into today’s valuation just yet.

With that in mind, investors can get in early on this theme before the rest of the market catches onto it, rendering the opportunity worthless.

After beating earnings expectations last quarter as well, reporting $7.19 in EPS versus an expected $7.07, some Wall Street analysts had no choice but to act accordingly.

This is where investors can note a new Outperform rating and $1,500 per share target from Robert W. Baird analyst Vikram Kesavabhotla, a call above the consensus Moderate Buy and $1,297 valuation to imply Netflix stock can rally by an additional 22% from where it trades today.