Bitcoin
MicroStrategy Shares Overtake Bitcoin with 115% Year-to-Date Increase
- MSTR has performed better in terms of price performance compared to BTC year-to-date.
- BTC price movement remained stagnant and did not see much growth.
Michael Saylor’s Microstrategy [MSTR] is famously famous for its optimistic stance towards Bitcoin [BTC].
MicroStrategy’s stock performance has been a hot topic among investors lately, especially due to its significant outperformance compared to Bitcoin itself.
While Bitcoin is up about 40% year to date, MicroStrategy shares are up more than 115%.
MicroStrategy Beats the Odds
Investors are currently bullish on MicroStrategy, possibly due to a broader trend of interest in companies with significant exposure to Bitcoin.
Maxim Group initiated research coverage on MicroStrategy shares with a Buy rating and a healthy price target of $1,835. This represented over 20% upside from the last close of $1,495.
Maxim’s bullish stance is fueled by MicroStrategy’s aggressive move into Bitcoin 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 now. At the time of writing, MicroStrategy held an extensive portfolio of 226,331 bitcoins.
This bold move has proven to be profitable as Bitcoin investments are estimated to represent around 55% of MicroStrategy’s share value, presenting a change in the company’s financial profile.
What’s behind MSTR’s growth?
MicroStrategy acts as a leveraged fund, using 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, non-profits, and even nation states, especially with favorable changes in tax regulations.
MicroStrategy’s stock price rose 5% after Maxim Group initiated coverage of the company, likely due to investor optimism surrounding its Bitcoin holdings and AI integration plans.
The company’s 2023 financial results showed a positive transformation, particularly in its cloud business. Subscription services revenue experienced a substantial increase of 33.6% year-over-year to reach $81 million.
Although product license and support revenues fell, the cloud segment’s gross margin increased significantly, rising from 59.2% in 2022 to 60.9% in 2023.
To read Bitcoins [BTC] Price prediction 2024-25
These signs point to a successful shift in MicroStrategy’s business model and may have contributed to it outperforming BTC.
At the time of writing, BTC was trading at $61,152.44 and its price had fallen by 0.35% in the last 24 hours.
Source: Santíment