Options traders are largely betting against the cryptocurrency treasury company Strategy (MSTR). A significant portion of the heavy put buying came from spread strategies linked to the YieldMax Short MSTR Option Strategy ETF (WNTR), a fund that shortens Strategy stock and generates income through put spreads. It might also be mentioned that MSTR’s stock is down 32.2% over the past month, while WNTR is up 17.4% over the same period. This suggests a short squeeze might be brewing.
Bitcoin (BTCUSD) is going through a rough patch, linked to fears about quantum computing. However, Bernstein analysts believe the reason is that retail capital is nowadays chasing AI stocks obsessively. Therefore, the investor base has simply shifted around rather than lost confidence in crypto overall.
However, MSTR continues to back Bitcoin, holding 845,256 of the cryptocurrency.
About Strategy Stock
Strategy, originally known as MicroStrategy, is based in Tysons Corner, Virginia and operates as the world's largest Bitcoin Treasury Company while also delivering AI-driven enterprise analytics software via cloud-based subscriptions. The company's strategic shift rebrands it as "Strategy" and focuses on holding Bitcoin as its main treasury reserve asset, building its Bitcoin holdings through financing and operational funds, while promoting Bitcoin as digital capital.
This transformation builds on its existing business intelligence software business, pushing forward a vision of "Intelligence Everywhere" that blends Bitcoin innovation with enterprise analytics. Strategy boasts a market capitalization reaching $42.21 billion.
A drop in Bitcoin prices, rising debt, and the company's dilution of shares to fund crypto accumulation have affected MSTR’s stock. Over the past 52 weeks, the stock has declined 66%, and it is down 16.29% year-to-date (YTD). It reached a 52-week low of $104.17 on Feb. 5, but it is up 22.1% from that level.
On a forward-adjusted basis, MSTR’s price-to-earnings (non-GAAP) ratio of 2.33 times is lower than the industry average of 25.12.
Strategy Q1 Revenue Rises While Bitcoin Holdings Push Loss Higher
On May 5, Strategy reported an 11.9% year-over-year (YOY) jump in its first-quarter revenue to $124.30 million. At that point (as of May 3), the company had 818,334 Bitcoin holdings on its balance sheet, reflecting 22% YTD growth, and a BTC yield of 9.4%. Its BTC gains were 63,410 YTD, translating to a gain of $4.97 billion.
The company reported robust adoption of its short-duration high-yield credit perpetual preferred stock, Stretch (STRC). In fact, STRC raised $5.58 billion as of May 3, up 189% YTD.
However, not everything was rosy for the quarter. Its operating loss for Q1 was $14.47 billion, compared to just $5.92 billion for the prior-year period. This huge upsurge in losses was driven by an unrealized loss of $14.46 billion on the company’s digital assets.
The company had proposed a shareholder vote to double STRC's dividend payment frequency to a semi-monthly schedule, thereby making the asset more attractive. This month, stockholders approved the proposal.
Wall Street analysts have a mixed view about Strategy’s bottom-line trajectory. For fiscal 2026, its earnings per share are expected to grow considerably YOY to $116.70. However, EPS for fiscal 2027 is projected to decrease by 36% annually to $74.73.
What Do Analysts Think About Strategy Stock?
This month, Canaccord Genuity analyst Joseph Vafi maintained a “Buy” rating on Strategy but lowered the price target sharply from $224 to $163. This shows that analysts are reassessing the company’s growth prospects.
Mizuho analysts maintained an “Outperform” rating on the stock, but lowered the price target from $320 to $265. The brokerage firm said that Strategy holds reserves of around $2 billion to cover roughly two years of dividends, while its “innovative products” serve as flexible financial instruments. Moreover, the firm believes that Strategy would return to profitability in 2026.
Last month, analysts at TD Cowen raised their price target on MSTR to $400, while maintaining a “Buy” rating. The analyst firm revealed that it remains bullish on Strategy because of its aggressive Bitcoin purchases.
MSTR is widely followed on Wall Street, with analysts awarding it a consensus “Strong Buy” rating. Of the 18 analysts rating the stock, a majority of 15 analysts have rated it a “Strong Buy,” one analyst suggests a “Moderate Buy,” while one analyst is playing it safe with a “Hold” rating, and one rated it “Strong Sell.” The consensus price target of $363.62 represents a 185.87% upside from current levels. The Street-high price target of $645 indicates a 407.1% upside.
