Strategy (MSTR) Stock Surges on TD Cowen's $400 Price Target After Massive Bitcoin Acquisition

Key Takeaways

Table of Contents

Analyst Lance Vitanza from TD Cowen boosted Strategy’s price target to $400 from $395, maintaining a Buy rating with potential 143% gains ahead.
In a single week from May 11-17, Strategy acquired 24,869 Bitcoin worth approximately $2.01 billion, marking one of 2024’s largest purchases.
Strategy’s Bitcoin treasury now stands at 843,738 BTC — representing over 4% of the cryptocurrency’s fixed 21 million coin supply.
The firm successfully retired approximately $1.5 billion in convertible notes at an 8% discount, strengthening its financial position.
Analysts maintain a Strong Buy consensus rating with an average target of $324.67, suggesting roughly 97% potential upside.

TD Cowen analyst Lance Vitanza has increased his price target on Strategy (MSTR) to $400, nudging up from his previous $395 forecast, while maintaining his Buy recommendation on the stock. At current trading levels, this target represents approximately 143% potential appreciation.

Strategy Inc, MSTR

Vitanza, a 5-star rated analyst, highlighted Strategy’s aggressive Bitcoin accumulation strategy and improved financial structure as primary catalysts supporting his bullish thesis.

On Wednesday, Strategy shares opened at $164.63, slipping 1.2% during the trading session. The stock’s 52-week trading range spans from $104.17 to $457.22, with a beta coefficient of 3.59 indicating significant price volatility relative to the broader market.

During the week spanning May 11 through May 17, Strategy added 24,869 Bitcoin to its holdings at a cost of roughly $2.01 billion. This acquisition represents one of the company’s most substantial weekly purchases throughout the current year.

The company’s cumulative Bitcoin position now totals 843,738 coins — an amount exceeding 4% of Bitcoin’s hard-capped 21 million token maximum supply. Strategy maintains an unrivaled position among publicly traded corporations in terms of Bitcoin ownership.

Vitanza observed that Strategy’s second quarter Bitcoin accumulation has already exceeded initial projections. His updated forecast anticipates the company will add approximately 100,000 Bitcoin during Q2 alone.

Strategy’s Funding Approach for Bitcoin Purchases

Instead of relying predominantly on common equity dilution, Strategy has leveraged its STRC perpetual preferred stock offering as part of what CEO Michael Saylor terms the “42/42 Plan.” During Q2, the company generated roughly $1.95 billion through this mechanism, directing the majority of proceeds toward additional Bitcoin acquisitions.

TD Cowen specifically addressed shareholder concerns regarding dilution, noting that the annualized preferred stock dividend payment represents merely 2.2% of Strategy’s Bitcoin holdings. The firm also revised its 2026 Bitcoin yield projection upward to 19.8% from the previous 18.2% estimate.

Additionally, Strategy executed the retirement of approximately $1.5 billion in convertible bonds at roughly 8% below par value. According to Vitanza, this transaction mitigates refinancing risks while bolstering the company’s balance sheet strength.

TD Cowen’s $400 price target incorporates assumptions of stronger Bitcoin price appreciation and projects Bitcoin could climb to $140,000 by the conclusion of 2026.

Institutional Interest in MSTR Accelerates

ProShare Advisors LLC expanded its MSTR stake by 45.7% during the fourth quarter, adding 131,014 shares to bring its total position to 417,790 shares valued at approximately $63.5 million.

Several other institutional investors have similarly increased their allocations. Sei Investments Co. grew its MSTR holdings by 136% in the second quarter. Manufacturers Life Insurance Company boosted its position by 59.4% during the same timeframe.

Collectively, institutional investors now control 59.84% of Strategy’s total shares outstanding.

Regarding financial performance, Strategy delivered quarterly revenue of $124.30 million, exceeding analyst expectations of $120.75 million. However, the company posted earnings per share of -$38.25, significantly missing the consensus estimate of -$0.86.

The broader Wall Street analyst community remains decidedly optimistic. With 12 Buy ratings and 1 Hold rating issued over the past three months, MSTR holds a Strong Buy consensus. The mean price target among analysts stands at $324.67, implying approximately 97% upside potential from present levels.

Cantor Fitzgerald reaffirmed its Overweight rating on May 11. Benchmark sustained its Buy rating with a $570 target on May 6, though this marked a reduction from its prior $705 target.

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