MicroStrategy is on 'accelerated track to exceed capital raise targets' and buy more bitcoin, Mizuho says

Business intelligence company MicroStrategy is the largest corporate holder of bitcoin, which has led to a 570% surge in MSTR's share price over the past year. Mizuho Securities believes the price of bitcoin has room to run another 30% in the next three years, which is why the firm has slapped a new "outperform" rating on MicroStrategy's stock.

Mizuho analysts led by Dan Dolev cite the growing global adoption of the world's largest cryptocurrency, as well as a more favorable political environment led by U.S. President Donald Trump.

"We identified a 79% correlation between bitcoin adoption growth (as measured by the number of bitcoin wallet addresses with >0.01 bitcoin) and bitcoin price," the analysts wrote in a note to clients. "Assuming adoption growth continues on a similar trajectory through 2027 implies 25-30% annual bitcoin price appreciation."

MicroStrategy has accelerated its bitcoin buying in recent months. The company's strategy is to use proceeds from debt and equity issuance to accumulate bitcoin to grow its bitcoin holdings per diluted share. As of Jan. 27, MicroStrategy holds 471,107 BTC worth over $46 billion. In fact, MSTR currently has about a 75% premium to the underlying value of its BTC holdings.

"Unlike other vehicles that offer bitcoin exposure (e.g. bitcoin ETFs or bitcoin itself), MSTR can increase its bitcoin per diluted share," the Muzho analysts wrote. "Its existence as an operating company allows it to access debt and equity capital markets to raise money to purchase more bitcoin."

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MicroStrategy's first-mover advantage has allowed it to achieve scale and granted it early access to capital markets, Mizuho said, as evidenced by its "21/21 Plan" to raise $21 billion of each debt and equity by 2027, and use those proceeds to buy bitcoin.

"We believe favorable market conditions put MSTR on a fast track to exceed targets (already raised $3bn/$18bn of debt/equity since October announcement)," Mizuho wrote. They estimate MSTR bitcoin holdings of 783,000 at a $166,000 market price by the end of 2027, which implies a $130 billion value.

Earlier this week, MicroStrategy launched its convertible preferred stock offering available to institutional investors and select retail investors that will offer 2.5 million shares of MSTR's Series perpetual strike preferred stock. MicroStrategy co-founder and Executive Chairman Michael Saylor has said the company aims to offer investors "both returns and volatility at factors of 1.5x those of bitcoin itself."

MicroStrategy's stock trades around $347 per share with a $87 billion market cap, according to The Block's MSTR price data.