AllianceBernstein lowers price target on Strategy to $350, still sees Bitcoin hitting $300K
The investment firm trimmed its MSTR outlook by $100 but maintained an outperform rating, citing equity dilution and a shifting interest rate landscape.
AllianceBernstein has cut its price target on Strategy, the company formerly known as MicroStrategy, from $450 to $350. The firm kept its outperform rating intact.
The revision, dated August 26, reflects Bernstein’s updated thinking on Bitcoin’s market cycle, the corrosive effects of equity dilution on Strategy’s valuation model, and a macroeconomic backdrop that has become considerably less forgiving for companies that finance their Bitcoin buying sprees by printing new shares.
The macro case behind the cut
Bernstein’s analysts pointed to what they describe as the end of a roughly 40-year period during which interest rates were in a structural decline. Governments are now staring down record levels of sovereign debt while simultaneously facing soaring debt-servicing costs.
For Strategy, higher-for-longer interest rates mean the cost of its aggressive Bitcoin acquisition playbook has gone up. The company has consistently tapped equity markets to fund its Bitcoin treasury strategy, issuing new shares to raise capital for additional purchases.
Bernstein’s Bitcoin roadmap
Bernstein projects Bitcoin will reach a new all-time high of $150,000 by mid-2027, then continue climbing toward a market cycle peak of $300,000 by 2029.
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A split screen on Wall Street
Just one day before Bernstein’s downward revision, Canaccord Genuity moved in the opposite direction, raising its MSTR price target from $130 to $175 on August 25. The gap between those two targets, $350 versus $175, illustrates just how wide the range of opinions is on a company that has essentially transformed itself from a business intelligence software firm into a leveraged Bitcoin vehicle.
That transformation, spearheaded by executive chairman Michael Saylor, has made Strategy the single largest corporate holder of Bitcoin.
What investors should be watching
Bernstein’s maintained outperform rating suggests the firm believes the bull case still holds over a multi-year timeframe. A $300,000 Bitcoin by 2029 would make Strategy’s current accumulation strategy look prescient regardless of short-term dilution concerns. But the reduced price target acknowledges that the path from here to there involves real costs that need to be priced in.
Traders watching MSTR should keep an eye on two variables above all else: the pace of new share issuances relative to Bitcoin’s price movement, and any shifts in the interest rate outlook that could either tighten or loosen the financial vise that prompted Bernstein’s revision in the first place.