In a modest but sound move that underscores Wall Street’s lingering faith in one of the most audacious corporate experiments of the decade, TD Cowen lifted its 12-month price target on Strategy Inc., the former MicroStrategy, to $400 per share from $395.
In a note shared to clients, TD Cowen Analyst Lance Vitanza kept the Buy rating intact, pointing to the company’s accelerating Bitcoin haul and a shrewd bit of financial housekeeping that retired expensive debt on the cheap.
The tweak arrives at a moment when Strategy’s stock MSTR has taken a beating, closing the Monday session at $166.63 after shedding 6.08% on the day while more than 60% from its peak. Yet beneath the volatility lies a story of relentless Bitcoin accumulation that continues to reshape how investors think about corporate treasuries in the digital asset era.
With recent addition of 24,869 BTC, Strategy now sits on 843,738 BTC—more than 4% of all Bitcoin that will ever exist—a hoard built not through mining or speculation alone, but through sophisticated capital market maneuvers that have turned the software firm into something closer to a leveraged Bitcoin holding company.
The Shift to Preferred Equity: A More Efficient Bitcoin Engine
At the heart of TD Cowen’s optimism is Strategy’s pivot toward preferred equity, particularly its STRC series, as a funding tool. In the second quarter of 2026, the company raised roughly $1.95 billion through these instruments with far less dilution to common shareholders than straight equity offerings would have caused.
The proceeds moved swiftly into Bitcoin purchases, pushing the firm past TD Cowen’s full-quarter forecast well before May ended.
Vitanza now models about 100,000 BTC acquired in Q2 alone. That momentum has lifted the firm’s 2026 projections: BTC Yield climbs to 19.8% from 18.2%, while the expected dollar gain from Bitcoin holdings jumps to $15.16 billion.
“Bitcoin per 1,000 fully diluted shares reached 2.21x as of May 17, up from 1.95x at year-end 2025,” the note observed, framing the progress as validation of a financing model that appears more efficient than skeptics had anticipated.
This isn’t accidental. Since rebranding from MicroStrategy to Strategy in early 2025 and completing the legal name change later that year, the company under Executive Chairman Michael Saylor and CEO Phong Le has doubled down on its identity as the world’s first and largest “Bitcoin Treasury Company.”
The preferred stock route allows it to tap investor appetite for yield and priority claims without flooding the market with common shares at inopportune times. For a stock that trades at a premium or discount to its net asset value depending on sentiment, this discipline matters.
Read: STRC — The $100 “Stable Stock” Fueling Strategy’s BTC Treasury
Cleaning Up the Balance Sheet: The $1.5 Billion Repurchase
Complementing the buying spree is a defensive masterstroke on the liability side. Last week, Strategy announced it would repurchase approximately $1.5 billion of its 0% Convertible Senior Notes due 2029 in privately negotiated deals, paying an estimated $1.38 billion—an 8% discount to face value. The notes will be cancelled after settlement around May 19, halving the outstanding 2029 tranche and leaving roughly $1.5 billion remaining.
TD Cowen called the move accretive, reducing future dilution risk from conversions and improving overall credit metrics. Funding is expected to come from cash reserves, at-the-market equity sales, or even selective Bitcoin sales—a flexible toolkit that keeps options open.
In a market where convertible debt has long been a cheap way for Strategy to finance Bitcoin buys, retiring some of it at a discount when the stock is lower demonstrates opportunistic management.
This deleveraging comes as Bitcoin itself hovers near levels that test conviction. The cryptocurrency’s price action has cooled from last year’s highs, dragging Strategy’s shares with it. Yet the company’s ability to keep stacking sats while tidying its capital structure suggests resilience that bulls find reassuring.
How TD Cowen Crunches the Numbers
The $400 target rests on a transparent framework. TD Cowen applies a 3x multiple to its updated 2026 BTC Dollar Gain estimate, layers in projected year-end Bitcoin holdings valued at about $132.9 billion, and subtracts net debt plus preferred equity obligations. The result lands near $400 on a fully diluted basis.
It’s a methodology that has evolved with the company. Over the past year, Vitanza’s targets have swung from as high as $680 during peak enthusiasm to cuts when Bitcoin yield expectations moderated.
The current call reflects a balanced view: bullish on the long-term Bitcoin thesis and Strategy’s execution edge, but grounded in realistic assumptions about dilution, execution risk, and crypto volatility.
For context, Strategy’s software business—its original business intelligence and analytics platform—now plays second fiddle. Revenue there remains steady but secondary to the treasury operation that dominates the balance sheet and market narrative. This hybrid identity continues to puzzle traditional analysts even as crypto-native investors embrace it.
Broader Implications for Corporate Bitcoin Strategies
Strategy’s trajectory raises bigger questions about the future of corporate finance in a Bitcoin world. Other firms have dipped toes into treasury allocations, but none match the scale or sophistication here.
By leveraging preferred equity, convertibles, and equity raises in concert, Strategy has turned Bitcoin accumulation into something approaching a repeatable industrial process—one that rewards patience and capital market creativity.
Critics point to massive dilution over time and the inherent leverage that amplifies both upside and downside. At current prices, TD Cowen’s target still implies more than 140% upside, a figure that will excite some and strike others as optimistic given Bitcoin’s own path to new highs remains uncertain.
Yet the persistence of bullish voices like TD Cowen, even after trimming targets at various points in 2025 and 2026, speaks to the underlying conviction.
In Vitanza’s view, Strategy’s model allows it to grow Bitcoin per share even without a persistent premium to net asset value—a structural advantage that could compound powerfully if Bitcoin enters another secular bull phase.
As markets digest this latest note, Strategy’s stock will likely remain tethered to Bitcoin’s every move. The company has proven adept at navigating downturns by simply buying more, but sustained success will hinge on execution, regulatory clarity around digital assets, and broader macroeconomic currents.
Also read: Shinhan Eyes Hong Kong Crypto License to Expand Tokenized Finance
