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Is Strategy Inc.’s (MSTR) Bitcoin Reliance a Blessing or a Risk? TD Cowen Stays Bullish

Strategy Inc. (NASDAQ:MSTR) is one of the best stocks to buy according to Citadel LLC. On October 31, TD Cowen analyst Lance Vitanza reaffirmed his Buy rating on the stock but lowered his price target to $535 from $620 previously, following the company’s Q3 results, according to TheFly. While the target was cut, the analyst said that the new credit rating by S&P could expand its investor base and help increase the reach of funding. As was visible in earlier cycles, he also anticipates a rebound in bitcoin-related premiums and capital issuance by 2026.

Before this update, Vitanza had reaffirmed his Buy rating on the stock on October 27 with an unchanged price target of $620, citing the increasing institutional adoption of bitcoin as the primary driver of his positive stance.

Vitanza cited JPMorgan’s acceptance of bitcoin as collateral for certain financing activities to emphasize the structural tailwinds from the institutional and broader financial systems’ adoption of digital assets. This, in his view, supports the investment case for established players and investors in the space, including Strategy Inc. (NASDAQ:MSTR). With a disciplined capital strategy, the company’s bitcoin holdings grow faster than equity issuance, enabling it to increase bitcoin ownership per share and, in turn, increase shareholder value.

According to an October 28 report from Bloomberg, S&P Global Ratings cited the company’s heavy reliance on cryptocurrency as one of the major reasons for assigning it a B- credit rating, a junk or non-investment-grade rating. Moreover, the rating company also flagged limited business diversification and low liquidity as key credit risks.

Separately, while Strategy Inc. (NASDAQ:MSTR) is sometimes seen as a proxy for bitcoin, YTD performance has diverged, with the stock down around 2% and bitcoin up nearly 19%. Investors should also note that Strategy carries high volatility with an equity beta of 3.8.

Strategy Inc. (NASDAQ:MSTR) is a technology company that calls itself the world’s first and largest Bitcoin Treasury Company. The company has substantial Bitcoin holdings, which form a core part of its corporate strategy. Additionally, its software platform provides enterprise analytics and data visualization solutions.

While we acknowledge the risk and potential of MSTR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MSTR and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: Goldman Sachs Defense Stocks: Top 10 Stocks to Buy and  13 Best Tech Stocks Under $10 to Invest In.

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

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In fact, Verge argues this company’s supercheap AI technology should concern rivals.

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  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

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