Microstrategy stock expected to grow by 64% on Bitcoin bet

Microstrategy’s stock is forecasted to rise by 64%, driven by its aggressive Bitcoin (CRYPTO:BTC) investment strategy, according to a report by Bernstein analysts. 

The company, led by Michael Saylor, has accumulated around 252,220 BTC, valued at approximately $16 billion. 

Since adopting its Bitcoin-focused strategy in 2020, Microstrategy has been attracting market attention with its consistent accumulation of Bitcoin. 

Bernstein analysts Gautam Chhugani, Mahika Sapra, and Sanskar Chindalia attribute the stock's potential growth to Saylor’s leadership and the company’s BTC holdings.

According to Bernstein, this forecast is also tied to their bullish outlook on Bitcoin’s future price. 

They predict Bitcoin could reach $200,000 by 2025, $500,000 by 2029, and potentially $1 million by 2033. 

“Michael Saylor pioneered a Bitcoin treasury model for corporates,” the analysts wrote in their Monday report. 

They further added that since adopting this strategy, Microstrategy's stock has outperformed other assets like gold, the SP 500, and even Bitcoin itself.

Despite the optimism, challenges remain. 

Microstrategy’s financial results for the second quarter of 2024 reported a decline in gross profit, from $93.3 million in Q2 2023 to $80.5 million. 

Operating expenses also surged to $280.8 million, primarily due to a $180.1 million impairment loss related to its Bitcoin investments. 

The company posted a net loss of $102.6 million for the quarter.

Bernstein’s forecast is based on the assumption that Bitcoin prices will continue to surge, which could mitigate the risks associated with Bitcoin volatility and net losses in the short term, while providing long-term growth for Microstrategy.

At the time of writing, the Bitcoin price was $62,389.77.