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
-
Six Year-End Deadlines for Retirees in 2024Here are six key end-of-year 2024 deadlines that retirees and those saving to retire won't want to miss.
-
Roth or Traditional: How to Choose a Retirement Tax StrategyWhen picking which type of 401(k) or IRA is right for you, consider whether you want to save a little on your taxes now — or save a lot more on them later.
-
Roth or Traditional: How to Choose a Retirement Tax Strategy
When picking which type of 401(k) or IRA is right for you, consider whether you want to save a little on your taxes now — or save a lot more on them later.
-
Buying an Annuity? Avoid These Three Classic MistakesAnnuities can be a sensible option for retirement, offering steady income in your later years. But these common traps can damage your investment.
-
Stock Market Today: Stocks Rally as Econ News Affirms Rate-Cut BetsSome soft economic data was good news for rate cuts and risk assets.
-
Why Pure Storage Stock Is Sailing Higher After EarningsPure Storage stock is surging after the data storage firm beat earnings expectations and announced a deal with a major technology company. Here's what you need to know.
-
Is Dollar Tree Stock a Buy, Hold or Sell After Earnings?Dollar Tree stock is higher Wednesday after the retailer beat Q3 earnings expectations and updated its full-year outlook. Here's what Wall Street has to say.
-
UnitedHealth Cancels Investor Day After Executive Brian Thompson Is ShotUnitedHealth Group was scheduled to host its annual Investor Day Wednesday but the event was cancelled following the fatal shooting of its insurance unit CEO.
-
Salesforce Leads Dow Jones Stocks After Earnings. Here's WhySalesforce stock is soaring after the tech giant beat revenue expectations for its fiscal third quarter and gave a strong outlook for its fourth quarter.
-
Gifting While You're Alive: Tax Benefits and Practical TipsWhy wait until you're gone to help the people and causes you love? Get a jump-start on gifting and see all the good you can do.
