MicroStrategy's Bitcoin Strategy Could Boost Stock by 64%
- Bernstein analysts have set a price target of $290 for MicroStrategy's stock, indicating a potential 64% increase.
- The company has amassed a Bitcoin holding worth approximately $16 billion, making it one of the largest holders of the cryptocurrency.
- Despite its aggressive strategy, MicroStrategy's current unprofitability raises concerns about its future inclusion in the S&P 500.
In a recent report, Bernstein analysts have projected a significant price target of $290 for MicroStrategy's stock, indicating a potential 64% increase. This optimistic outlook is largely attributed to the company's aggressive strategy of acquiring Bitcoin, which has resulted in a substantial holding valued at approximately $16 billion. MicroStrategy, under the leadership of Executive Chairman Michael Saylor, has been recognized for pioneering a corporate Bitcoin treasury model since 2020. The analysts believe that if Bitcoin reaches $1 million by 2033, MicroStrategy's stock could benefit immensely. However, the report also highlights potential risks, including a scenario where Bitcoin could stagnate at $200,000, which might force the company to liquidate its holdings to satisfy stockholder demands. Despite these risks, MicroStrategy's market capitalization has surged to over $35 billion, aligning it with several S&P 500 companies. Nevertheless, the company reported a net loss of $102 million in the second quarter of 2024, which complicates its chances of being included in the S&P 500 in the near future. The overall market sentiment towards Bitcoin remains bullish, with a nearly 50% increase in value this year, further supporting MicroStrategy's strategic decisions.