Shares of MicroStrategy (NASDAQ:MSTR), which accumulates Bitcoin (BTC-USD) and provides artificial intelligence (AI)- powered enterprise analytics software, have gained over 371% in one year. Despite this notable gain, Benchmark analyst Mark Palmer is bullish about MSTR stock, foreseeing further potential upside. In a note to investors dated April 8, the analyst said that MicroStrategy stock stands to benefit from the upcoming fourth Bitcoin halving, which is set to occur soon.
Palmer, who increased MicroStrategy stock’s price target to $1,875 from $990, said the Bitcoin halving event will likely trigger a supply shock. This could be amplified by increased demand led by the launch of spot Bitcoin ETFs. The analyst expects this phenomenon to push Bitcoin’s price higher, leading to an increase in MSTR stock.
It’s worth noting that a Bitcoin halving event occurs approximately every four years. This event results in a reduction of available Bitcoins in the market, subsequently causing a decrease in supply and an increase in demand. As a result, the price of Bitcoin tends to appreciate following the halving event.
Is MSTR a Good Stock to Buy?
MicroStrategy’s management revealed during the Q4 conference call that as of February 5, 2024, the company possessed 190,000 Bitcoins. MSTR acquired this top cryptocurrency at an average cost of $31,224 per Bitcoin, totaling $5.93 billion. They intend to increase their holdings further by utilizing their cash reserves in the future.
With a growing Bitcoin portfolio and a positive outlook on digital currencies, analysts express optimism about MSTR’s future. MSTR stock has a Strong Buy consensus rating, reflecting four unanimous Buy recommendations. Analysts’ average price target on MSTR stock is $1,733.75, implying 10.71% upside potential from current levels.
