Bitcoin (BTCUSD) has staged a formidable resurgence, rising nearly 25% in just three months. One of the catalysts behind the dramatic climb has been an executive order from President Donald Trump proposing the creation of a Strategic Bitcoin Reserve. Although the reserve has not yet been operationalized, its premise signals a major shift in federal posture.
If implemented, the government would be required to hold Bitcoin acquired through asset forfeitures, effectively transforming the United States into a prominent institutional holder of the asset. With legal clarity emerging, institutional investors and large capital allocators are once again pouring funds into the ecosystem.
Amid this bullish backdrop, Strategy (MSTR)— the world's first “Bitcoin Treasury Company” and the largest corporate holder of BTC— now commands attention. As of July 29, the company's Bitcoin holdings reached 628,791 BTC.
MSTR stock has reflected this momentum. Shares have surged 36% year-to-date (YTD), outperforming the S&P 500 Index’s ($SPX) gain of 8%. On July 31, all eyes will turn to Strategy as it unveils its second-quarter fiscal 2025 earnings after market close.
About Strategy Stock
Based in Tysons Corner, Virginia, Strategy has undergone a complete evolution. It was once recognized for its business intelligence software, helping enterprises make sense of large-scale data. Today, the firm stands as a pioneering “Bitcoin Treasury Company,” holding firm to its belief in Bitcoin as digital capital.
Through a deliberate strategy of issuing equity and debt, and reinvesting operational cash flows, Strategy has consistently accumulated Bitcoin. Currently, the company commands a market capitalization of $110 billion.
The company’s Bitcoin-centric pivot has paid off handsomely. Over the past 52 weeks, MSTR stock has skyrocketed 134%. On July 16, the stock touched a recent high of $457.22.
However, its valuation commands a premium. Shares are priced at 239 times forward sales, far exceeding the industry average.
Strategy Misses on Q1 Earnings
Strategy’s Q1 fiscal 2025 results, announced on May 1, came in below market expectations. Revenue dropped 3.6% year-over-year (YOY) to $111.07 million, falling short of Wall Street’s projection of $116.39 million. Gross profit also slipped 9.5% to $77.1 million. Still, some segments delivered notable gains.
Subscription services brought in $37.1 million, marking a 61.6% annual jump. Product licenses and subscriptions together generated $44.4 million, a 23.6% increase. But the bottom line painted a more volatile picture. Operating losses widened sharply to $5.9 billion.
Net loss ballooned to $4.2 billion. Loss per share jumped to $16.49. Analysts had predicted a loss per share of $0.11 for the quarter. Yet, despite these headline losses, Strategy’s liquidity position improved. Cash and equivalents rose to $60.3 million by March-end, up from $38.1 million three months prior.
More importantly, the firm continued to expand its core Bitcoin holdings. As of March 31, it held 528,185 BTC acquired at an average price of $67,457. At market value, this stash stood at $43.5 billion, reflecting Bitcoin’s rally to $82,445.
Q1 also brought capital strength. Strategy executed a record $21 billion common stock at-the-market (ATM) offering, adding 301,335 BTC to its books. Alongside this, the firm completed two highly successful preferred stock initial public offerings (IPOs). Most recently, Strategy acquired another 4,225 BTC at a cost of $472.5 million. This move came as Bitcoin broke through the $123,000 mark, its highest level yet.
All this sets the tone for the upcoming Q2 earnings. Analysts predict that the company’s loss per share will narrow by 84% YOY to $0.12. Meanwhile, for full fiscal 2025, the loss is projected to shrink even more sharply by 208% to EPS of $7.30.
What Do Analysts Expect for Strategy Stock?
The broader analyst community holds a firm conviction on MSTR stock’s outlook, assigning shares an overall rating of “Strong Buy.” Among the 13 analysts covering MSTR, 11 have a “Strong Buy,” one maintains a “Moderate Buy,” and just one classifies the stock as a “Strong Sell.”
MSTR stock’s average price target of $548.69 represents potential upside of 39%. TD Cowen, more bullish than its peers, recently raised its target to $680, which suggests a potential climb of 72% from current levels.
