Strategy Inc (NASDAQ:MSTR) shares surged 22% Friday as TD Cowen maintained its $440 price target, arguing there is “no reasonable scenario” forcing the company to sell Bitcoin (CRYPTO: BTC) despite trading underwater on its holdings.
TD Cowen analysts Lance Vitanza and Jonnathan Navarrete said Strategy is “better positioned than ever” to participate in a potential recovery, even as the premise looks strained amid steep declines. The company’s shares are down 13.4% so far in 2026, adding to a 47.5% slump last year.
The volatility looks intentional ― analysts noted Strategy’s common stock is designed to be about 1.5 times more volatile than Bitcoin.
“It should come as no surprise that Strategy’s shares outperform Bitcoin when the price rises, and underperform when falling. This is, in fact, by design,” they said.
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On solvency concerns, TD Cowen argued Strategy has the “wherewithal to ride out a hypothetically much steeper Bitcoin rout.”
They pointed to the company’s $2.25 billion cash reserve that could fund $900 million in fixed charges for nearly 17 months while covering $1 billion of convertible notes putable in 2027.
The earliest trouble point appears in March 2028, when additional convertibles mature or become putable.
Moreover, TD Cowen maintained Bitcoin price targets at $177,000 by December 2026 and $226,000 by December 2027.
TD Cowen’s view aligns with recent Strategy executive comments.
On the Q4 earnings call revealing $126 billion in losses, CEO Phong Le said Bitcoin would need to fall to around $8,000 and remain there for five to six years before Strategy faces difficulty servicing convertible debt.
Executive Chairman Michael Saylor reiterated the capital structure is designed to withstand extended volatility, dismissing quantum computing threats as “horrible FUD.”
TD Cowen highlighted Strategy’s emerging “digital credit engine” as a key thesis component.
The company raised over $7 billion of preferred equity in fiscal 2025, representing 33% of all preferred equity sold in the U.S.
The firm’s STRC preferred stock pays an 11.25% annualized dividend rate with daily liquidity above $118 million, providing an alternative funding mechanism beyond convertible debt.
