Strategy Bitcoin purchases lift TD Cowen target to $400
TD Cowen raised its price target for MicroStrategy’s corporate vehicle Strategy after the company reported fresh Bitcoin purchases and updated debt-management plans. The brokerage kept a Buy rating and lifted the target to $400 from $395, implying more than 140% upside from the prior close.
Strategy added 24,869 BTC between May 11 and May 17 for about $2.01 billion, paying an average $80,985 per Bitcoin (fees and expenses included). Total holdings rose to 843,738 BTC. TD Cowen said the accumulation exceeded its prior quarterly expectations and improved per-share Bitcoin exposure.
Financing details matter for traders: Strategy raised nearly $1.95 billion in Q2 primarily via preferred equity rather than common stock issuance, with nearly all proceeds directed toward Bitcoin buys. TD Cowen also expects Strategy to purchase around 100,000 BTC in Q2, raising its full-year BTC Yield estimate to 19.8% from 18.2% and increasing projected BTC Dollar Gain to $15.16B (from $13.89B).
On balance-sheet risk, Strategy also completed a convertible note repurchase: it bought back about $1.5B of 2029 convertible notes for an estimated $1.38B, described as ~8% below face value. TD Cowen said this lowers future dilution exposure and improves the credit/refinancing profile.
The valuation logic: TD Cowen’s $400 target uses a 3x multiple on projected 2026 BTC Dollar Gain, plus expected year-end Bitcoin value, minus expected debt and preferred equity obligations. After the latest disclosure, Strategy shares closed at $166.63 on Monday.
Bullish
The news is broadly bullish for crypto-linked equities because Strategy’s Bitcoin purchases are tracking above TD Cowen’s expectations, increasing near-term demand for BTC and improving per-share BTC exposure—both factors that have historically supported Strategy-like vehicles during “buy-the-dip” accumulation phases. The convertible note buyback at a ~8% discount also reduces future dilution risk, which tends to stabilize sentiment and support share-price resilience.
Short term, traders may react positively to the higher projected BTC Dollar Gain and BTC Yield, especially if BTC price remains firm while incremental buying continues. The heavy use of preferred equity (instead of common stock) can further reduce fear of immediate share dilution.
Long term, if the pace of roughly 100,000 BTC per quarter holds and Strategy maintains financing capacity under its existing issuance programs, market participants may continue to price in a sustained BTC accumulation cycle. Similar prior accumulation/valuation-upgrade episodes for Strategy-style firms have often led to tighter downside ranges and higher volatility on big BTC purchase disclosures, but with an overall bias toward upside when buyback/dilution controls are credible.