Bernstein analysts have set a $290 price target for MicroStrategy‘s MSTR stock, representing a potential 64% surge, based on the company’s aggressive Bitcoin acquisition strategy, according to a new report.
What Happened: MicroStrategy, led by Executive Chairman Michael Saylor, has amassed a substantial Bitcoin BTC/USD holding worth approximately $16 billion, making it one of the top 10 holders of the cryptocurrency.
Bernstein analysts Gautam Chhugani, Mahika Sapra and Sanskar Chindalia praised Saylor’s approach, stating, “Michael Saylor pioneered a Bitcoin treasury model for corporates,” DL News reported on Monday.
The analysts’ optimistic outlook is rooted in the assumption that Bitcoin will reach $1 million by 2033 and that MicroStrategy will continue its cryptocurrency purchases. This bullish sentiment aligns with the broader market’s enthusiasm for Bitcoin, which has seen a nearly 50% increase in value this year.
MicroStrategy’s Bitcoin strategy, initiated in 2020 through a series of convertible note sales, has proven successful thus far. The analysts noted, “Since adoption of its Bitcoin strategy in August 2020, MSTR’s stock is up [around] 13x, outperforming Bitcoin, Gold, S&P, Nasdaq, small cap software.”
Why It Matters: The strategy is not without risks. Bernstein highlighted a scenario where Bitcoin could reach $200,000 by the end of next year and then stagnate, potentially forcing MicroStrategy to sell its holdings to repay stockholders and risking financial insolvency.
Despite these risks, MicroStrategy’s market capitalization has soared to over $35 billion, placing it on par with many S&P 500 companies. However, the company’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.
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