TD Cowen increased its price target for Strategy shares, citing the company’s recent purchases of Bitcoin and efforts to manage its debt. These actions have strengthened the amount of Bitcoin held per share and improved the company’s overall financial health.
Summary
- TD Cowen raised its Strategy price target to $400 after the company bought more Bitcoin than the firm had projected for the full second quarter.
- Strategy added 24,869 BTC in one week, pushing total holdings to 843,738 BTC, according to the company’s latest filing.
As a researcher following Strategy, I’m noting an update from TD Cowen analysts Lance Vitanza and Jonnathan Navarrete. They’ve increased their price target for the stock from $395 to $400, while maintaining their ‘Buy’ rating. This revision is based on surprisingly strong performance in treasury activity during the last quarter. Specifically, Strategy added significantly more Bitcoin than we – and TD Cowen – originally anticipated for the entire period, driving the more optimistic outlook.
As a crypto investor, I’ve been watching fundraising trends closely, and it’s interesting to see companies are now mostly raising capital through preferred equity instead of issuing more common stock. According to TD Cowen, a firm called Strategy raised almost $1.95 billion in the last quarter through preferred equity, but common stock sales were pretty minimal. What’s even more telling is that almost all of that money went straight into buying Bitcoin.
Strategy recently announced it purchased 24,869 Bitcoin between May 11th and 17th for approximately $2.01 billion. The average price paid per Bitcoin, including all costs, was $80,985, as detailed in a recent regulatory filing.
After its most recent purchase, Strategy now holds a total of 843,738 Bitcoin, which is over 4% of the total 21 million Bitcoin that will ever exist. According to company reports, Strategy has invested approximately $63.87 billion in Bitcoin, with an average purchase price of around $75,700 per Bitcoin.
TD Cowen now believes Strategy will buy approximately 100,000 Bitcoin in the second quarter. Because of this expected buying activity, they’ve increased their estimate for how much Bitcoin will earn throughout the year to 19.8% (up from 18.2%). They now project that the total dollar value gained from Bitcoin will reach $15.16 billion, an increase from their previous estimate of $13.89 billion.
TD Cowen reports that by May 17th, Bitcoin’s value per 1,000 shares reached 2.21 times its initial value, up from 1.95 times at the end of 2025. Analysts believe this increase validates Strategy’s funding method, as the amount of Bitcoin held is growing at a faster rate than the number of new shares being issued.
Convertible debt buyback supports target increase
In addition to buying Bitcoin, Strategy has taken steps to lower its future debt by buying back some of its convertible notes.
Previous reports indicated the company had agreed to repurchase around $1.5 billion of its convertible notes due in 2029, at a cost of approximately $1.38 billion. The company stated it could fund this purchase using its existing cash, funds raised through stock sales, or by selling some of its Bitcoin holdings.
TD Cowen completed a stock repurchase at a price about 8% below its face value. This move reduces the potential for future stock dilution, strengthens the company’s financial standing, and improves its ability to manage debt.
As part of our recent fundraising efforts, we sold a significant number of shares during the week of May 11th to May 17th. Specifically, we sold 430,344 shares of MSTR, which brought in approximately $83.7 million. We also issued and sold 19,519,801 shares of STRC preferred stock, generating nearly $1.949 billion in net proceeds. These sales were detailed in our regulatory filings.
As of May 17th, Strategy had approximately $17.51 billion remaining in its STRC issuance program and $26.27 billion available through its MSTR at-the-market offering.
Before MicroStrategy officially announced its latest Bitcoin purchase, co-founder Michael Saylor subtly suggested it on X (formerly Twitter). He posted “Big dot energy” along with a chart tracking the company’s Bitcoin holdings – a tactic he’s used before major purchase announcements.
TD Cowen arrived at its $400 valuation by forecasting Bitcoin profits for 2026, estimating them at $15.16 billion and multiplying that by three. They then added the value of Bitcoin they expect to hold at the end of the year (around $132.9 billion) and subtracted any anticipated debts and obligations to preferred shareholders.
Strategy shares finished trading on Monday at $166.63, which is almost 63% lower than their highest price over the past year ($455.90). Analysts at TD Cowen believe the stock could potentially increase by more than 140% based on this price.
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2026-05-19 15:53