MicroStrategy (MSTR) Crashes 40%, but Top Bernstein Analyst Still Sees 238% Upside

MicroStrategy / “Strategy” Stock Today: Deep Drawdown, Extreme Volatility

Strategy Inc. (NASDAQ: MSTR) – the company formerly known as MicroStrategy – remains one of the most volatile ways to bet on Bitcoin in public markets. As of Friday’s open, MSTR was trading around $177 per share, just a few dollars above its 52‑week low near $171 and miles below its 52‑week high of $543. ^[1]

Over the past month alone, the stock has plunged roughly 40%, while Bitcoin has “only” fallen a bit over 20–30% from its October peak, underscoring how leveraged MSTR is to crypto sentiment. ^[2]

Zooming out, MSTR is now about 67–68% below the record high it reached one year ago, even as Bitcoin has slid from around $126,000 to the low‑$80,000s. ^[3]

At the same time, the company has doubled down on its core thesis:

Strategy now holds roughly 649,870 Bitcoin, having recently bought another 8,178 BTC for about $835–$830 million at over $100,000 per coin. ^[4]
Across all purchases, its average acquisition cost sits around $74,400 per BTC, putting the company close to break‑even on paper as Bitcoin trades in the low‑$80Ks. ^[5]

That combination – massive Bitcoin exposure, plunging prices and relentless buying – has brought MSTR to a critical crossroads.

Bernstein’s Bold Call: 238% Upside from Here

Despite the brutal sell‑off, a high‑profile Wall Street voice is doubling down on the bull case.

According to a new note highlighted by TipRanks and other outlets today, Gautam Chhugani, a top analyst at Bernstein, has reiterated a “Buy” rating on Strategy/MicroStrategy with a $600 price target. ^[6]

With MSTR trading around $177, that target implies roughly 238% upside from current levels:

Current share price: ≈ $177
Bernstein target: $600
Implied gain: about +238% vs. today’s price

Chhugani’s thesis, as summarized in multiple reports, rests on a few key ideas: ^[7]

The recent collapse in Bitcoin and MSTR is seen as cyclical, not structural.
Strategy remains the flagship corporate vehicle for gaining Bitcoin exposure through an equity ticker.
If Bitcoin rebounds from its current slump, MSTR’s high beta and embedded leverage could turbo‑charge returns versus simply holding BTC.

In other words, Bernstein is essentially telling clients: the pain is severe, but the upside, if Bitcoin recovers, is potentially enormous.

Wall Street Consensus: “Strong Buy” – at Least on Paper

Bernstein isn’t alone in its optimism. Across the Street, MSTR still carries a consensus “Strong Buy” rating: ^[8]

Around 14–15 analysts cover the stock.
Most rate it Buy or Strong Buy, with a small minority at Hold or Sell.
The average price target clusters around $523–$535, implying well over 100% upside from current levels.

Some recent targets: ^[9]

BTIG: $630
TD Cowen: $620
Citigroup: $485
China Renaissance: $473

Even after the slide, almost every major covering firm’s target sits far above today’s price – at least for now.

Why the Market Is Panicking: MSCI, Nasdaq 100 and Forced Selling Risk

So why is MSTR crashing if the analyst community is still so bullish?

The short answer: index‑exclusion fears.

In the last 24 hours, several outlets have reported on a JPMorgan‑flagged risk that MicroStrategy/Strategy could be removed from major equity benchmarks such as: ^[10]

MSCI USA indices, and
The Nasdaq 100

A detailed report on CoinCentral and a follow‑up analysis from CoinDesk and Coinpedia/TradingView outline the potential impact: ^[11]

MSCI is reviewing whether companies with more than 50% of their assets in Bitcoin should be treated as funds rather than operating businesses.
Strategy clearly qualifies: it reportedly holds around 77% of its assets in BTC. ^[12]
JPMorgan estimates that removal from MSCI alone could force about $2.8 billion in selling from index‑tracking funds. ^[13]
If other index families follow, total mechanical outflows could climb toward $9–11.6 billion, based on how much of MSTR’s market cap sits in passive strategies. ^[14]

CoinDesk notes that roughly $9 billion of Strategy’s market value is currently held by passive products, meaning that a broad exclusion could dramatically shrink its shareholder base overnight. ^[15]

A TradingView/Coinpedia piece goes further, citing early indications that MSCI’s preliminary decision points to removing MicroStrategy from every major index on January 15, 2026, which would force passive funds and many pensions to dump the stock without discretion. ^[16]

This is why index fears, not just Bitcoin’s slide, are being highlighted as the main driver of MSTR’s 40% plunge over the past month. ^[17]

A High‑Octane Bitcoin Treasury Strategy Under Stress

The selling pressure is landing on a business model that was already under scrutiny.

A new analysis on Investing.com describes Strategy as the “world’s biggest Bitcoin treasury company” and argues that its “passive hoarding” model has been brutally exposed by the latest bout of crypto volatility: ^[18]

Key points from that piece and related coverage:

Share performance
- MSTR has fallen nearly 60% over the past four months, dropping from July highs around $456 to the $180 area earlier this week. ^[19]
- All of the gains tied to the post‑election crypto euphoria in late 2024 have effectively evaporated. ^[20]
Relentless Bitcoin buying
- In November alone, Strategy has spent over $1.5 billion on BTC, including the 8,178‑coin purchase announced this week. ^[21]
- Much of that capital has come from equity and convertible debt offerings, which have diluted existing shareholders – the share count is said to have ballooned from about 160 million to more than 280 million over the past year. ^[22]
No real hedging or yield strategy
- The company largely holds Bitcoin outright, rather than using options or yield‑generation strategies to cushion downside. ^[23]
- That leaves MSTR investors exposed almost entirely to spot BTC price swings, but with equity‑style volatility and dilution risk layered on top.

In effect, Strategy has become a leveraged, actively diluting Bitcoin proxy – fantastic leverage in a bull market, punishing in a downturn.

Technical Picture: Clinging to Support

From a market‑structure standpoint, MSTR is flashing both opportunity and danger.

Recent technical and trading data show: ^[24]

Current price zone
- Around $177, the stock sits roughly 3% above a key support near $172–173, highlighted by technical analysts as a must‑hold level.
- This is also just above the 52‑week low around $171.48.
Moving averages & trend
- MSTR trades far below its 50‑day moving average (~$288) and its 200‑day moving average (~$350) – classic markers of a deep downtrend.
Recent momentum
- The share price has dropped in eight of the last ten sessions, falling more than 25% over that span.
- Intraday swings regularly exceed 10%, underscoring the stock’s beta near 3.8–4.0 versus the broader market. ^[25]

With the chart this stretched, some traders see the potential for a violent short‑covering bounce if Bitcoin stabilizes or any positive headline hits. Others warn that a decisive break below $172 could open the door to a deeper slide as systematic strategies and nervous holders capitulate. ^[26]

Valuation Snapshot: Cheap or a Value Trap?

Depending on which metric and source you use, Strategy now screens as much cheaper than it used to – but that doesn’t automatically make it a bargain.

Some fundamental snapshots put the stock at a trailing P/E in the high single digits (≈8–9x), reflecting depressed expectations after the sell‑off. ^[27]
Others, using different earnings windows, show a mid‑teens P/E around 15–16x, with a market cap near $50–51 billion and a debt‑to‑equity ratio of just 0.17. ^[28]

On the crypto‑side valuation, CoinDesk and CoinCentral describe Strategy as trading only slightly above the value of its Bitcoin stash, with the stock’s premium to net asset value (mNAV) shrinking from more than 2.5× at the peak to close to 1.1–1.2× today. ^[29]

That collapse in premium is central to the bearish argument:

If index funds start dumping and Bitcoin keeps sliding, that slim premium could flip into a discount, turning MSTR into a structurally impaired asset rather than a high‑beta crypto vehicle.

The Bull Case vs. Bear Case for MSTR Right Now

Putting today’s news and the last few days of coverage together, the investment debate around MicroStrategy/Strategy looks something like this:

Bull Case (Bernstein & Other Optimists)

Massive upside if Bitcoin recovers: With price targets clustered around $523–$630, upside of 100–230%+ is mathematically plausible if BTC sets new highs. ^[30]
Unique positioning: Strategy remains the largest corporate holder of Bitcoin and the best‑known “Bitcoin stock,” likely to attract flows if sentiment swings positive again. ^[31]
Strong analyst support: A consensus Strong Buy, with only a small handful of bearish voices, suggests institutional investors still see long‑term value. ^[32]
Potential index‑exclusion overreaction: If MSCI and others ultimately soften or delay removal, today’s selling could look like forced panic in hindsight. ^[33]

Bear Case (Index & Risk Skeptics)

Billions in forced selling: A confirmed MSCI decision on or before January 15, 2026 could trigger $2.8–$11.6 billion in passive outflows, far beyond what most single stocks ever face in one event. ^[34]
Over‑reliance on Bitcoin: With more than three‑quarters of assets in BTC and limited hedging, MSTR offers little protection if the crypto downturn deepens. ^[35]
Dilution and funding risk: The company has repeatedly raised money via equity and preferred stock, diluting shareholders and raising questions over how sustainable the model is if capital markets cool. ^[36]
Premium at risk of flipping to discount: With the stock’s mNAV multiple hovering barely above 1×, any shock – index removals, another BTC leg down, or risk‑off sentiment – could push it into discount territory, historically associated with prolonged pain. ^[37]

Key Dates and Catalysts to Watch

For traders and long‑term holders alike, several near‑term milestones now dominate the MSTR story:

Daily Bitcoin price action
- As always, MSTR trades like Bitcoin on leverage. A sharp BTC rebound could spark a violent short squeeze; another leg down toward the company’s average purchase price around $74K would intensify stress. ^[38]
MSCI index review timeline
- Ongoing review of crypto‑heavy companies runs into December, with a widely cited January 15, 2026 effective date for any exclusions. ^[39]
Nasdaq 100 composition changes
- Speculation over whether MicroStrategy will remain in the Nasdaq 100 continues; any official announcement would be a major volatility event. ^[40]
Further analyst revisions
- If more firms follow Bernstein in reaffirming or raising targets, the market may begin to discount the worst‑case scenario. Conversely, cuts or downgrades could confirm the bears’ view that index risk outweighs upside.

Is MicroStrategy (MSTR) Stock a Buy Right Now?

That’s ultimately a decision each investor has to make based on risk tolerance and conviction in Bitcoin itself.

Based on today’s coverage and data:

For aggressive crypto bulls
- MSTR remains a high‑risk, high‑reward vehicle. If Bitcoin stages a strong recovery and MSCI’s final decision is less punitive than feared, Bernstein’s 238% upside scenario is not impossible. ^[41]
For cautious or income‑focused investors
- The combination of index‑exclusion risk, dilution, extreme volatility and concentration in one volatile asset makes MSTR a difficult fit.
For everyone
- This is not a typical software stock anymore – it’s effectively a leveraged Bitcoin treasury with a thin operational wrapper.

Anyone considering MSTR should:

Treat it like a speculative crypto position, not a conventional tech holding.
Size the position carefully, assuming large swings and potential gaps on news.
Diversify – avoid letting one Bitcoin‑linked equity dominate a portfolio.
Consider professional advice to evaluate how such a volatile asset fits (or doesn’t fit) a long‑term plan.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, an offer, or a solicitation to buy or sell any security or cryptocurrency. Always do your own research and consider consulting a licensed financial adviser.