MicroStrategy’s Bitcoin Strategy Under Scrutiny: TD Cowen Re-evaluates After Significant Stock Dip

MicroStrategy (MSTR), the enterprise software firm that has become synonymous with institutional Bitcoin investment, recently faced a challenging period. After a steep approximately 66% decline in its stock price during the latter half of 2025, investor confidence wavered. Now, even TD Cowen, a long-standing proponent of the company, has been prompted to re-evaluate its valuation model for Michael Saylor’s aggressive Bitcoin acquisition strategy.

Lance Vitanza, an analyst at TD Cowen, recently adjusted MicroStrategy’s 12-month price target downwards from an initial $500 to $440. Despite this revision, considering the current stock price of approximately $175, his updated target still suggests a substantial upside potential of around 150%, indicating continued long-term optimism.

Vitanza’s analysis highlights MicroStrategy’s unwavering commitment to Bitcoin. Even amidst what he describes as a “temporary downturn” in the cryptocurrency market, the company has actively raised capital to further bolster its Bitcoin holdings. MicroStrategy is now projected to acquire an additional 155,000 Bitcoin this year, a significant increase from the earlier estimate of 90,000 coins.

However, this aggressive accumulation strategy comes with a trade-off. Vitanza points out that MicroStrategy’s recent issuance of common stock at a minimal premium relative to its Net Asset Value (NAV) is likely to dilute a key performance metric: the “Bitcoin Yield.” This metric reflects the company’s return on its Bitcoin investments.

In his latest assessment, Vitanza revised MicroStrategy’s Bitcoin Yield for the current year down from an initial 8.8% to 7.1%, a notable decrease from the robust 22.8% recorded in 2025. Conversely, he anticipates a stronger “Bitcoin Dollar Gain” for the year, projecting it to reach $9.4 billion, an increase from the previously forecast $6.3 billion.

Despite the adjustments, Lance Vitanza continues to endorse MicroStrategy as an “effective proxy for Bitcoin exposure.” He believes it remains an ideal vehicle for investors who are bullish on Bitcoin’s long-term trajectory but prefer to gain exposure through the US equity market. Vitanza also reiterated his optimistic outlook for Bitcoin’s price, forecasting it to reach $177,000 by the end of this year and further climb to $226,000 by 2027.