What’s The Upside Potential For Strategy Stock?
Strategy stock (MSTR) is making headlines again after MSCI announced on January 6, 2026, that it will not exclude digital asset treasury companies from its indexes. This decision was a major relief for investors, as an exclusion could have triggered up to $8.8 billion in forced selling according to JPMorgan estimates. The stock surged 6% in after-hours trading following the announcement.
But let’s zoom out for a moment. Even with this positive development, MSTR has been hammered, plunging 65% from its 52-week high of over $450 to around $150 now. What’s behind this brutal selloff? The answer lies primarily in Bitcoin’s wild ride, as MSTR’s performance is deeply correlated to BTC’s price movements. Bitcoin crashed from highs above $126,000 in October 2025 to around $85,000 recently, and MSTR’s stock experienced even more dramatic swings. Adding fuel to the fire were mounting concerns over liquidity issues and aggressive stock dilution from the company’s relentless capital raises to fund Bitcoin purchases.
So here’s the million-dollar question: Can MSTR really climb 3x from current levels back past $450? We think it can. But before we dive into the details, if you seek an upside with less volatility than holding an individual stock, consider the High Quality Portfolio. It has comfortably outperformed its benchmark—a combination of the S&P 500, Russell, and S&P MidCap indexes—and has achieved returns exceeding 105% since its inception. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics. Separately, see – How Can Google Stock Fall?
What Could Drive a Triple-Digit Recovery?
- Bitcoin’s Recovery Momentum: The most obvious catalyst is Bitcoin itself. BTC has already bounced from recent lows under $85,000 to around $92,000 now. If Bitcoin continues its recovery trajectory toward the $100,000 level and beyond, MSTR stands to benefit dramatically given its leveraged exposure to the cryptocurrency. Technical indicators are showing promising signs, with long-term holders accumulating rather than distributing, and net outflows from exchanges reducing immediate selling pressure. Several analysts are targeting Bitcoin prices between $95,000 and $120,000 in the near term, which would provide substantial tailwinds for MSTR’s stock price.
- Institutional Sentiment and Index Stability: The MSCI decision to maintain MSTR in its indexes preserves critical institutional ownership and removes a significant overhang that had been weighing on the stock. This stability matters because passive funds tracking MSCI indexes must hold the stock, providing a steady demand base. With this uncertainty now resolved, institutional money managers can approach MSTR with renewed confidence rather than positioning defensively ahead of potential forced selling.
- Compelling Valuation According to Wall Street: Here’s where it gets interesting. The average analyst price target for MSTR sits at approximately $486, with estimates ranging from $229 to $705. That $486 average implies roughly 200% upside—essentially a 3x return from current levels around $160. Analysts maintain an overwhelmingly bullish stance, with 86% rating the stock as a buy or strong buy. These targets aren’t pulled from thin air; they reflect models based on MSTR’s massive Bitcoin holdings, which now exceed 670,000 BTC valued at over $60 billion.
- Financial Flexibility and Cash Reserves: MicroStrategy has built up approximately $2.25 billion in cash reserves, providing nearly three years of operational runway according to analysts. This cushion means the company isn’t forced to sell Bitcoin during downturns and can weather prolonged volatility. The company’s debt coverage remains strong even at significantly lower Bitcoin prices—management has stated that at $25,000 BTC, their coverage ratio would still be 2.0 times. Look at Strategy’s key financials.
But What About the Downside?
Let’s be honest—this isn’t a stock for the faint of heart. MSTR’s history during market crashes is stomach-churning. During the 2022 inflation shock, the stock collapsed 89.3% from $127 to under $14, far worse than the S&P 500’s 25.4% decline. During the 2020 COVID crash, MSTR fell 39.7% compared to the S&P’s 33.9% drop. And during the 2008 financial crisis, the stock plummeted 75.9% versus the S&P’s 56.8% decline. See – With Strategy Stock Sliding, Have You Assessed The Risk? – for more details.
However, here’s the counterargument: MSTR has consistently recovered from these drawdowns. After the 2022 crypto winter, the stock fully recovered by March 2024 and eventually surged to $473 by November 2024. Following the COVID crash, recovery came within seven months. Even after the 2008 crisis, MSTR eventually reclaimed its pre-crisis peak by March 2011.
The pattern is clear—extreme volatility in both directions. Investors face the very real prospect of enduring massive drawdowns, but those who can stomach the turbulence have historically been rewarded with outsized gains on the other side.
The Bottom Line
Can MSTR triple from here? The math certainly suggests it’s possible. Bitcoin’s recovery from recent lows, the removal of MSCI exclusion risk, analyst price targets averaging around $486, and the company’s substantial Bitcoin treasury all point toward significant upside potential. The key variables are Bitcoin’s price trajectory and whether institutional demand returns as crypto sentiment improves.
But make no mistake—the path higher won’t be smooth. MSTR amplifies Bitcoin’s volatility on both the upside and downside. If you can handle the possibility of significant drawdowns and maintain conviction through market turbulence, the potential for 3x returns exists. For those with weaker stomachs, watching from the sidelines might be the wiser choice. Also, investing in a single stock without comprehensive analysis can be risky. Consider the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid-, and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.
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