MicroStrategy (MSTR) shares have surged more sixfold for the year to date, thanks to a sizzling rally in bitcoin prices. Indeed, the cryptocurrency has more than doubled since the start of the year and is now flirting with the $100,000 price point.
More recently, shares of the enterprise software company which has become a bitcoin proxy, are up more than 120% in the past month as bitcoin has rallied north of 40%.
The key driver behind MicroStrategy's jaw-dropping climb up the price charts is its massive bitcoin holding. As of November 11, the company held 279,420 bitcoins, which it purchased for approximately $11.9 billion, or about $42,692 per bitcoin. With the digital asset now trading at about $97,000, MSTR's holdings are worth just over $27 billion.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"MicroStrategy transformed itself from a software company focused on product and subscription revenues to a bitcoin development company, owning ~1.3% of total bitcoin in circulation," wrote Bernstein analyst Gautam Chhugani in an October 7 note.
"Since adoption of its Bitcoin Strategy in August 2020, MSTR's stock is up roughly 13 times, outperforming bitcoin, gold, the S&P 500, the Nasdaq, and small-cap software," he added. "Its software business is ex-growth, and thus MSTR's growth has been led by its bitcoin acquisition strategy, funded by internal treasury, debt, and equity."
And the company only intends to buy more bitcoin. In a November 20 press release, MicroStrategy disclosed a convertible senior notes offering and intends to use the proceeds "to acquire additional bitcoin."
In addition to being a pioneer of bitcoin as a treasury asset, MicroStrategy hosts a Bitcoin for Corporations conference each year to evangelize the strategy, Chhugani said.
"Bitcoin to $100,000 seems around the corner and our $200,000 bitcoin target for 2025 now looks not as delusional," Chhugani wrote in a November 18 note.
Is MicroStrategy stock a buy, sell or hold?
Amid the MicroStrategy's blazing rally, Wall Street has grown increasingly bullish on the tech stock. According to S&P Global Market Intelligence, the consensus recommendation among the nine covering analysts it tracks is a Strong Buy, up from Buy in April.
However, analysts' price targets have not been able to keep up with MSTR's surging stock price. Indeed, the average analyst price target of $341.23 represents a discount of more than 20% to current levels. A continued rise in MicroStrategy and bitcoin could encourage Wall Street to increase its price targets.
Related Content
-
The Most Tax-Friendly State for Retirement in 2025: Here It IsRetirement Tax How do you retire ‘tax-free’? This state doesn’t tax retirement income, has a low median property tax bill, and even offers savings on gas. Are you ready for a move?
-
Plan for Higher Health Care Costs in 2026: Projected Medicare Part B and Part D PremiumsIn 2026, Medicare participants will pay more for their health care. Part B costs are expected to rise more than 10%. Here's what you can do.
-
Avoid Medicare's 'Shadow Tax' With This Financial Expert's IRMAA-Busting TipsYou're cruising along in retirement, and then bam: Your Medicare premiums soar because your income crossed the limit. Take a breath. There could be a solution.
-
Grilling Season and ETFs: There's More Than One Way to Cook Up a PortfolioExchange-traded funds come in a multitude of 'flavors' these days, from passive to active to factor-based. Their flexibility is what makes them so delicious.
-
You Don't Want It, But You Should Plan for It Anyway: An Expert Guide to Long-Term CarePlanning for long-term care is crucial to protect your independence, family and financial stability against unexpected health events and rising care costs not covered by standard insurance.
-
Japan Tariffs: 5 Things That Might Get More Expensive for YouPresident Donald Trump's trade agreement with Japan features a 15% reciprocal tariff for all imported products, which could impact the prices of these items when you go shopping.
-
Five Questions to Help Ensure a Happy, Secure RetirementYou need to drill down to what you really want out of retirement. Then you can get down to the business of crafting a financial plan to make it happen.
-
I'm a Financial Adviser: This Is How You Can Save for Big Goals Even if You Feel Like You're Barely Getting ByLearning good financial habits — building an emergency fund, paying down debt, saving consistently — gives you flexibility, options and a path to security.
-
How to Buy an Annuity Online (Without Regret)You should never be rushed into buying an annuity. But now that they can be sold quickly and easily online, you need to be more alert than ever to pushy salesmanship. Here are four signs you're working online with a professional.
-
Dow Dives 542 Points on Soft Jobs Data: Stock Market TodayThe last day of a busy week ends with the first greater-than-1% move in either direction in more than a month.
