Benchmark Analyst Reiterates Buy Rating for Strategy

Benchmark analyst Mark Palmer has reiterated his buy rating for Bitcoin giant Strategy, increasing the firm’s price target for MSTR to $705, reflecting an 85% rise from its current share price.

The newly set target is based on the expectation that Bitcoin will hit $225,000 by the end of 2026.

The company reported a net income of $10 billion in Q2, mainly derived from unrealized gains on its $71 billion Bitcoin holdings. Currently, the stock is trading at around $379.71, showing a 4% drop since the opening bell, according to Yahoo Finance.

Palmer mentioned that MSTR may be recognized not just for its impressive earnings but also for its ambitions to become the leading Bitcoin treasury company and the largest corporate treasury globally.

During the latest earnings call, CEO Phong Le stated that the company aims to surpass the treasury sizes of giants like Microsoft, Google, and Amazon within the next three to five years and ultimately eclipse Berkshire Hathaway’s $410 billion in cash and equivalents.

A significant strategic shift was also highlighted regarding how the company will fund its Bitcoin treasury growth, moving away from convertible debt to a preferred-stock-focused funding model.

Saylor articulated that the use of convertible notes was suitable in MSTR’s early stages of Bitcoin acquisition but mentioned that the company redeemed $1 billion in these notes in January to decrease leverage.

The Benchmark note further emphasized MSTR’s new strategy for issuing common equity, indicating they will only sell shares when the stock trades at a premium to the calculated per-share value of its Bitcoin and operating assets.

Palmer concluded that MSTR is evolving from merely buying Bitcoin to creating a corporate treasury machine designed to generate Bitcoin-denominated returns, manage capital raises effectively, and accelerate growth.

As of the latest update, Bitcoin has faced significant challenges alongside the broader crypto market and equities. Currently, BTC trades for $114,950, having fallen 3.1% in the last day, with spot trading volume reaching $57 billion. The total cryptocurrency market cap has also decreased 8% since Thursday, sitting at $3.8 trillion.