Optimistic about accelerating token accumulation and deleveraging! TD Cowen raises MicroStrategy's target price to $400.

Renowned investment bank TD Cowen raises the target price for MicroStrategy to $400. The company accelerates Bitcoin accumulation and repurchases $1.5 billion in convertible bonds, successfully optimizing its balance sheet.

On Tuesday, TD Cowen, a well-known Wall Street investment bank, released a report stating that as Strategy accelerates its Bitcoin purchases, along with recent large-scale repurchases of convertible bonds and improvements to its balance sheet, the company's overall financial health continues to improve. Therefore, the firm slightly raised the target price for MSTR from $395 to $400 and maintained a "Buy" rating.

Analysts said that Strategy not only "hoards coins" faster than market expectations but also that a series of recent precise balance sheet optimization operations are positive signals for shareholders and creditors.

TD Cowen's report states that since the last earnings report, Strategy's Bitcoin holdings have grown significantly faster than initially modeled, especially in the second quarter, primarily through raising funds via preferred stock. To date, it has raised $1.95 billion, while the issuance of common stock has been relatively limited, successfully reducing dilution pressure, and almost all funds have been directly used to buy Bitcoin.

As a result, the amount of Bitcoin accumulated by Strategy before the end of the second quarter has already exceeded TD Cowen's original full-season estimate. Analysts now expect Strategy to purchase about 100k more Bitcoins in Q2, and have also raised their full-year forecasts:

• The 2026 "Bitcoin Yield (BTC Yield)" estimate has been revised upward from 18.2% to 19.8%;
• The 2026 "Bitcoin Dollar Gain (BTC $ Gain)" estimate has increased from $13.89 billion to $15.16 billion.

As of May 17, the number of Bitcoins per 1,000 shares of "fully diluted shares" for Strategy has increased from 1.95 times at the end of 2025 to 2.21 times. TD Cowen believes that even with ongoing financing and expansion, Strategy's Bitcoin accumulation pace still outpaces its equity dilution rate, which is the best proof of the success of the company's fundraising model.

Balance Sheet Cleanup

In addition to continued Bitcoin accumulation, another major reason TD Cowen raised the target price is that Strategy recently announced a repurchase of approximately $1.5 billion of zero-coupon convertible bonds due 2029. According to the announcement, Strategy completed the buyback at about $1.38 billion, equivalent to repaying debt at approximately 92% of face value ahead of schedule.

TD Cowen's analysis indicates that this move not only effectively reduces the risk exposure after full dilution, improves the company's overall credit quality, but also alleviates future refinancing pressures, signaling to the market a high level of financial flexibility.

Controlling over 4% of Bitcoin globally, with attractive potential upside

Blockworks previously reported that between May 11 and 17, Strategy spent about $2.01 billion to acquire 24,869 Bitcoins in one go. Currently, Strategy holds a total of 843,738 Bitcoins, accounting for 4% of the 21 million Bitcoins in circulation.

So how was the $400 target price calculated? The TD Cowen team explained that they applied a 3x valuation multiple to their 2026 estimate of $15.16 billion in "Bitcoin dollar gains (BTC $ Gain)"; then added the expected year-end total Bitcoin holdings valued at up to $132.9 billion; finally, after deducting $3.5 billion in debt and $15.5 billion in preferred stock obligations, they arrived at a fair value of approximately $400 per fully diluted share.

Looking at the market performance, Strategy (MSTR) closed Monday at $166.63, compared to the high of $455.90 set in the past year, representing a significant retracement of about 63%. Based on TD Cowen's $400 target price, this implies a potential upside of over 140% from the current level.

• This article is reprinted with permission from: Blockworks
• Original title: "Bullish on Strategy's Accelerated Coin Hoarding and Deleveraging! TD Cowen Raises MSTR Target Price to $400"
• Original author: Block Sister MEL