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TD Cowen has elevated its price objective for MicroStrategy (MSTR) to $400, citing substantial bitcoin acquisition and a revised financing approach as primary factors for potential growth. With the stock currently trading around $166, this new target suggests an increase of over 140%.
The investment firm reaffirmed its “buy” recommendation, pointing to MicroStrategy’s accelerated bitcoin purchases and modifications to its capital structure that bolster bitcoin holdings per share. MicroStrategy, under the leadership of executive chairman Michael Saylor, now possesses 843,738 BTC, valued at approximately $64 billion. This holding accounts for more than 4% of the total Bitcoin supply limit.
Analysts observed that the company has surpassed previous projections for bitcoin purchases within the current quarter. From May 11 to May 17, MicroStrategy procured 24,869 BTC at a cost of roughly $2.01 billion. TD Cowen now anticipates the company will acquire close to 100,000 BTC solely in the second quarter of this year.
A crucial indicator for the firm’s investment rationale is the amount of bitcoin per 1,000 fully diluted shares, which has climbed to 2.21 from 1.95 at the close of 2025. This rise indicates that bitcoin accumulation has outpaced the dilution resulting from share issuances, a significant concern for observers of MicroStrategy’s aggressive capital strategy.
MicroStrategy’s favored equity structure
The company’s recent utilization of preferred equity has been instrumental in this trend. In the second quarter, MicroStrategy generated approximately $1.95 billion through the issuance of preferred shares, with the majority of the funds allocated to bitcoin acquisitions. TD Cowen considers this method less dilutive than issuing common stock and more advantageous for current shareholders.
Concurrently, MicroStrategy has implemented measures to enhance its credit standing. The corporation repurchased about $1.5 billion of its convertible notes at a discount, a maneuver that diminishes future refinancing risks and caps potential share dilution. Analysts characterized this transaction as a favorable development for both equity investors and bondholders.
TD Cowen’s valuation model applies a multiplier to anticipated bitcoin appreciation and integrates expected reserves, liabilities, and preferred equity commitments. The firm forecasts bitcoin-related gains exceeding $15 billion in 2026, which underpins the revised price objective.
Notwithstanding the optimistic projection, MicroStrategy’s stock remains susceptible to fluctuations and is closely linked to Bitcoin’s price movements. The shares have depreciated by approximately 60% over the last year and are trading significantly below their 52-week peak of over $450. Recent downturns in Bitcoin’s value have also exerted downward pressure on the stock, reinforcing its function as a magnified indicator of the digital asset’s performance.
Information compiled from materials : bitcoinmagazine.com