By Nate Wolf
When a Wall Street firm slashes a stock's price target in half, it often comes with a warning to dump your shares -- or at least sit on the sidelines. Not today, at least not for Strategy stock.
In a research note Thursday, Cantor Fitzgerald dropped its target for Strategy shares to $229 from $560, a staggering 59% cut. Nonetheless, the firm reiterated an Overweight rating and counseled investors to ignore the "fear-mongering."
Strategy stock was down 1.5% to $183.20 in premarket trading Friday. After beginning the year on a tear, Strategy shares have fallen 36% in 2025, weighed down by falling cryptocurrency prices and threat of being booted from MSCI indexes.
The move from Cantor Fitzgerald perhaps reflects that, whether you love it or loathe it, Strategy isn't a normal stock. The company pioneered the so-called digital-asset treasury, all but shelving its software operating business to buy up some $60 billion worth of Bitcoin.
At its peak, the stock traded at a wide premium to the value of the Bitcoin it owned. But with Bitcoin now trading at around $91,000 apiece -- down 28% from its all-time high in early October -- Strategy's premium has narrowed. Where the stock goes next largely depends on Bitcoin, and Cantor Fitzgerald remains bullish on the cryptocurrency.
"Ultimately, we see this has a healthy pullback in crypto and Bitcoin," wrote analysts Brett Knoblauch and Gareth Garcetta. "Our long-term thesis for Bitcoin becoming a global reserve asset remains unchanged."
The dramatic pullback in prices likely isn't the start of a "crypto winter," the pair argued, as similar selloffs in the current cycle have seen Bitcoin reach new highs later on. More sustained downturns have started with a "black swan-type event," like the Federal Reserve raising interest rates in 2022. Cantor Fitzgerald doesn't see a similar shock this time around.
Some onlookers have worried Strategy will be forced to liquidate its Bitcoin holdings to meet debt and dividend obligations. Cantor Fitzgerald says this fear isn't warranted absent a further 90% pullback in Bitcoin. The company's $8.2 billion in notional debt pales in comparison to its Bitcoin holdings.
Investors have also noted that Strategy isn't buying the crypto dip, which may appear strange for a company with a seemingly insatiable appetite for Bitcoin. But Strategy's model is only to buy Bitcoin when it will boost the stock's premium relative to its holdings, Knoblauch and Garcetta said. That isn't the case right now, they argued.
So why the 59% price-target cut? "We believe it is prudent to adjust our valuation," the pair wrote, pointing to the pullback in Bitcoin prices and the falling premiums every digital-asset treasury has experienced.
Essentially, everything is working against Strategy right now, but that won't always be the case.
Most analysts agree. Of the 18 firms polled by FactSet, 16 have a Buy or equivalent rating on the stock, and the average price target sits at $508.43. Even in a bearish environment for the stock, bears are hard to find on Wall Street.
Write to Nate Wolf at nate.wolf@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
December 05, 2025 09:11 ET (14:11 GMT)
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