MicroStrategy, led by Executive Chairman Michael Saylor, has become a major player in the Bitcoin market, accumulating a massive $16 billion worth of the cryptocurrency. This aggressive strategy has caught the attention of analysts, particularly those at Bernstein, who have set a $290 price target for MicroStrategy’s MSTR stock, representing a potential 64% surge.
The Bernstein analysts, Gautam Chhugani, Mahika Sapra, and Sanskar Chindalia, believe that Saylor’s Bitcoin treasury model for corporations is a winning strategy. Their bullish outlook is based on the assumption that Bitcoin will reach $1 million by 2033 and that MicroStrategy will continue its cryptocurrency purchases. This aligns with the broader market sentiment, which has seen a nearly 50% increase in Bitcoin’s value this year.
Since adopting its Bitcoin strategy in 2020, MicroStrategy’s stock has soared, outperforming Bitcoin, Gold, S&P, Nasdaq, and small-cap software. The company’s market capitalization has reached over $35 billion, putting it on par with many S&P 500 companies. However, MicroStrategy’s current unprofitability — it reported a net loss of $102 million in the second quarter of 2024 — makes S&P 500 inclusion unlikely in the near term.
The analysts acknowledge that the strategy is not without risks. A scenario where Bitcoin reaches $200,000 by the end of next year and then stagnates could force MicroStrategy to sell its holdings to repay stockholders, potentially leading to financial insolvency.
Despite these risks, MicroStrategy’s aggressive Bitcoin strategy has generated significant attention and underscores the growing influence of cryptocurrency in the corporate world. The success of this strategy hinges on the future trajectory of Bitcoin, which remains a volatile and unpredictable asset.
