Benchmark Gives MicroStrategy (MSTR) a Buy Rating with a Target Price of $990 USD
Investment bank Benchmark has given a buy rating and a target price of $990 to software development company MicroStrategy (MSTR). MicroStrategy’s stock price rose more than 9% yesterday, reaching $871.8, the highest since April 2021, driven by the surge in Bitcoin.
According to a report from CoinDesk, Benchmark stated in its research report that MicroStrategy has a unique business model based on acquiring and holding Bitcoin (BTC), with Bitcoin accounting for a large portion of the software company’s valuation. Benchmark has given a buy rating to the stock with a target price of $990.
Analyst Mark Palmer pointed out that the launch of multiple Bitcoin ETFs has led to an increase in Bitcoin demand, and the slowdown in supply caused by the halving could potentially drive up the price of cryptocurrencies in the coming years. When Bitcoin is halved, miner rewards will decrease by 50%, reducing the token supply in the market.
Their fundamental assumption is that the price of Bitcoin will reach $125,000 by the end of 2025.
Since announcing its Treasury Reserve Policy in September 2020, MicroStrategy has been using Bitcoin as its primary reserve asset. In addition to cash flow generated by its core business, the company continues to buy Bitcoin through debt and equity financing transactions.
Since its purchase of Bitcoin, the company’s stock price (blue line) has closely followed the trend of Bitcoin (orange line), rising by 308% while Bitcoin has risen by 282% during the same period.
MicroStrategy’s stock price rose more than 9% yesterday, reaching $871.8, the highest since April 2021, driven by the surge in Bitcoin.
MicroStrategy recently announced its entry into Bitcoin again at an average price of over $50,000. The company now holds 193,000 BTC, with a holding value of over $10 billion and nearly $5 billion in unrealized gains.
With the recent surge in Bitcoin, MicroStrategy founder Michael Saylor also stated that the company will undergo a rebranding and position itself as a “Bitcoin development company.” He further advised investors to buy MicroStrategy stocks instead of Bitcoin, as the company has also capitalized on the AI trend.
