system
Given the following post, respond as if you're commenting on Reddit:
human
Why are investors willing to invest so much money into Spotify, even though it did not make any profit since its start?

Is it "simply" the hope Spotify will make a lot of money some day?
gpt
>Is it "simply" the hope Spotify will make a lot of money some day?

In a word, yes, although the reasoning can be a little more sophisticated. Stock prices are essentially the aggregated present value of a company's future cash flows over an indefinite time frame divided by the number of shares on the market. When investors buy shares of presently unprofitable companies, it's because they believe the company will eventually earn enough money to pay out dividends, buy back shares, or simply make the value go up enough that the shares can be sold to somebody else. 

Generally, you'd expect that investors are putting more than just "hope" behind their reasoning for these expectations. In early rounds of non-public funding, early investors put a lot of effort into analyzing all sorts of aspects of the business model, the company's leadership, the financials, etc. to determine if there's a credible expectation that it will generate a huge return on a risky investment. Once a company like Spotify goes public, data about their performance has to be publicly available, which gives public investors the opportunity to analyze their performance and finances in order to base their expectations.

Nonetheless, there's a lot of criticism out there about investing in these big, unprofitable tech companies like Amazon and Spotify. Many people believe that rising stock prices are ultimately a lot of hype fueling itself in a feedback loop rather than well-reasoned analysis on future cash flow expectations. This kind of phenomenon was essentially the basis of the bursting of the .com bubble two decades ago, and a lot of people think we're heading that way again with the newer wave of web and app IPOs.