- MSTR has done better in terms of price performance compared to BTC so far.
- The price movement of BTC remained stagnant and did not see much growth.
Microstrategy by Michael Saylor [MSTR] is known for its bullish stance towards Bitcoin [BTC].
MicroStrategy’s stock performance has been a hot topic among investors lately, mainly due to its significant outperformance against Bitcoin itself.
While Bitcoin is up about 40% this year, shares of MicroStrategy are up more than 115%.
MicroStrategy exceeds all expectations
Investors are currently bullish on MicroStrategy, possibly reflecting a broader trend of interest in companies with significant exposure to Bitcoin.
Maxim Group initiated a review of MicroStrategy shares with a buy rating and a healthy price target of $1,835. This represented an increase of more than 20% from the last closing price of 1,495.
Maxim’s bullish stance is fueled by MicroStrategy’s aggressive Bitcoin play and its transition into the future with a focus on AI-driven cloud services.
MicroStrategy’s association with Bitcoin has been part of its identity for some time. At the time of writing, MicroStrategy had an extensive portfolio of 226,331 bitcoins.
This bold move has proven lucrative as Bitcoin investments are estimated to represent approximately 55% of MicroStrategy’s stock value, marking a shift in the company’s financial profile.
What’s behind MSTR’s growth?
MicroStrategy acts as a leveraged fund, using both debt and equity to acquire Bitcoin. This leverage is seen as a key driver of the stock’s outperformance.
This strategy could be adopted by more companies, nonprofits, and even nation states, especially if favorable changes in tax rules occur.
MicroStrategy’s stock price rose 5% after Maxim Group initiated coverage of the company, likely reflecting investor optimism about their Bitcoin holdings and AI integration plans.
The company’s 2023 financial results showed positive transformation, especially in their cloud business. Subscription services revenue saw a significant increase of 33.6% year over year, reaching $81 million.
Although product licensing and support revenue declined, the cloud segment’s gross margin increased significantly, from 59.2% in 2022 to 60.9% in 2023.
Read Bitcoin’s [BTC] Price forecast 2024-25
These signs point to a successful shift in MicroStrategy’s business model and may have helped it outperform BTC.
At the time of writing, BTC was trading at $61,152.44 and the price was down 0.35% over the past 24 hours.
Source: Santiment