Summary Strategy Inc. offers a unique dual exposure to Bitcoin and AI-driven analytics software, with a Strong Buy rating. Strategy's BTC holdings exceed its market cap by 20%, effectively offering investors free upside on both BTC and its undervalued software business. The company’s software segment trades at just 4x 2026 earnings, far below sector medians, and its capital structure is highly liquid. While Strategy is a high-beta, high-reward play tied to BTC sentiment, a dovish Fed and BTC rally could double the stock in 2026. Investment Thesis Strategy Inc. ( MSTR ), formerly MicroStrategy, is one of the rare plays that is a mixed play between BTC, being primarily a bitcoin treasury company, and AI with its original analytics software business. The company has actually been in business since a long time, founded in 1989, and fully transformed its operational model. Strategy doesn’t have a direct competitor that could run it out of business. As primarily a BTC treasury company, the main downside risk is the long-term price trend of bitcoin in case of a very prolonged downtrend. However, with the institutional and even governmental adoption trends of BTC, the future looks bright, and there are multiple opportunities for wealth generation. I rate the stock a Strong Buy and currently hold it in my portfolio at an average purchase price of $155.80. Data by YCharts From a technical perspective, the stock has been hitting and bouncing back on a very strong support level at around $155, mirroring BTC’s $90k price level. Bitcoin is at a critical level, seemingly rebounding on a multi-year support line, and could soar to a new all-time high, especially if the new dovish Fed Chair picked by Donald Trump starts massively increasing liquidity. Data by YCharts Business Overview and BTC Holdings The best way to describe Strategy’s bitcoin business is a “BTC snowball.” Strategy’s strategy is to issue debt to acquire more bitcoin and increase each year the number of sats per share. A “sat” is the smallest indivisible unit of a bitcoin and corresponds to one hundredth million of a bitcoin. The strategy to issue debt in order to increase bitcoin holdings means the bitcoin per share has been increasing, with a yield generated every year, even during the bear market years of 2022 and 2023, when it still generated 1.8% and 7.3% increases of sats per share. Strategy Q3 Earnings Report Strategy holds as of January 19, 2026 , 709,715 bitcoins, which corresponds to 3.3% of the entire BTC ever in existence. The entire holdings are worth $63.9 billion at $90,000 per BTC, and the BTC holdings alone surpass its current market cap of $52 billion, meaning you get 20% of its BTC holdings for free as well as its entire software business. The current valuation doesn’t take into account the levered snowball effect, the current low average cost per BTC of $75,979, or the earnings of its AI software business. That's, in my view, an important mispricing for the stock, which was trading north of $400 per share recently. Put simply, buying Strategy gives you BTC, plus 20% of its BTC holdings for free, plus the software part of the company. Hard Figures The company’s software revenues have been relatively steady, hovering around $500 million per year since 2015, with a tight range of $463-530 million, while net income fluctuates wildly, highly dependent on how much is spent on bitcoin acquisitions. Right now, the software business is attractively valued at around 4x the 2026 earnings and 3x the 2027 earnings. The software business is, in my view, in deep value territory, trading at a significant discount relative to the software sector, closer to 30x, as per Seeking Alpha’s sector median. Strategy Q3 Earnings Report Strategy also boasts a relatively solid capital structure. The company’s EV, market cap, and BTC NAV dropped by around 25-30% since October 24th, when the above was reported. However, the asset side is still significantly above the company’s debt, preferred equity, and dividend combined. Total assets, including both BTC and software business assets, reached $73.6 billion, while total liabilities stand at $15.5 billion. Thanks to its BTC-heavy capital structure, the company’s assets are highly liquid and allow it for quick business redirections. In fact, the company has the 5th largest treasury, as per the below chart, behind only Warren Buffett’s Berkshire Hathaway, Amazon, Google, and Microsoft, and ahead of Nvidia and Apple, for example. The company continues to aggressively convert its cash, shares, and debt to bitcoin with large purchases this year as well, according to recent company announcements . Strategy continues to buy the dips under the psychological $100k bar. Strategy Q3 Earnings Report In my view, the fact that the current market cap is trading 10% below its BTC holdings, ignoring the potential levered effect in case the price of BTC rises (which adds significant value to the sats per share), and giving away for free the entire software business. Another way to see it is when I buy MSTR, I am buying the software business for 4x its forward earnings and getting its entire BTC holding for free. In my view, the stock should be trading at about double its current price to reflect the duality of Strategy, trading hence in the range it was trading at a few months ago, within $300-400 per share. Risk and Opportunity in 2026 Strategy is facing clear risks from a BTC price and sentiment perspective. Given the company issued debt and shares, a prolonged downturn of BTC value per share could cause a panic and make the stock price spiral down even further. As we saw recently, when BTC dropped from $120k to $90k, shedding 25% of its price, Strategy was cut in more than half from $400 per share to now $160 per share. I believe, as a shareholder myself in MSTR, that sentiment will improve, with renewed interest from institutional but also retail buyers after Trump’s new Fed Chair pick is announced. The new Fed Chair will very likely be dovish, and as long as inflation remains low and/or trending downward, we could expect massive monetary stimulus and risk assets to flare again. The stock could rapidly double in case BTC claims a new all-time high in 2026. Bottom Line The stock is a high-risk and very high-reward opportunity. An investment in the stock at this price could yield a 2-3x if market conditions improve and liquidity in the markets increases - which is my base case at the moment. However, with a beta of 3.4x , caution is warranted, and the stock doesn’t necessarily fit every investor’s risk profile. It’s a leveraged bet on Bitcoin, and you receive a software business for free as a discount.
