Can MSTR's deep discount be reversed? Wall Street outlines the 2026 Strategy stock price surge roadmap to $500

Wall Street senior analysts have outlined a valuation blueprint for Strategy stock reaching as high as $500 by 2026. The core logic hinges on the significant discount between the approximately $59 billion worth of Bitcoin assets on the company’s balance sheet and its current market cap of about $46 billion. This forecast is not blind optimism but based on a mathematical calculation assuming Bitcoin prices stabilize and the net asset value discount converges.

However, the road ahead is not smooth. The upcoming MSCI classification decision on January 15 poses major uncertainty, potentially leading to massive outflows from index funds. Meanwhile, after plunging 66%, MSTR’s stock price has initially stabilized near the critical support level of $150, with technical indicators showing weakening selling pressure, laying a structural foundation for a subsequent rebound. Recent data from founder Michael Saylor shows that trading activity of its stock far exceeds that of tech giants, highlighting market high attention and strategic positioning as a “Bitcoin proxy stock.”

Wall Street’s $500 Blueprint: Rational Derivation Based on the Balance Sheet

Recently, Strategy’s stock experienced a brutal correction, dropping from over $450 to around $150 within six months—a 66% decline. This decline not only reflected Bitcoin market retracement but also prompted reevaluation of leverage structure, equity dilution risk, and balance sheet risks. The evaporation of nearly a trillion dollars in market value forced investors to reassess its core value. Yet, this sharp price compression also created a rare phenomenon: a significant discount of MSTR’s stock trading price relative to its Bitcoin net asset value. This fundamentally alters its risk-return profile. The key question is whether the current level reflects structural damage or is a “reset” phase before a larger revaluation.

In response, Wall Street offers an attractive answer. TD Cowen senior analyst Lance Vitanza and others reaffirm a $500 target for MSTR stock. This target is not based on pure optimism about Bitcoin prices but on sober balance sheet calculations. Currently, Strategy holds about $59 billion in Bitcoin, with a total market cap of roughly $46 billion. This means investors are buying the Bitcoin assets behind it at a roughly 20-25% discount. This discount arises from market concerns over leverage dilution, potential index exclusion, and Bitcoin’s own weakness. Vitanza’s model assumes that if Bitcoin stabilizes, the excessive leverage fears driven by panic and misunderstanding will be corrected, and the net asset value discount could narrow or even reverse.

Of course, bullish logic faces sharp criticism. Noted gold advocate and crypto critic Peter Schiff argues that rising leverage and financing costs are eroding long-term returns. However, this view overlooks a key detail: Strategy’s leverage is directly backed by its Bitcoin holdings, not operational losses. Its debt structure is tightly linked to Bitcoin’s balance sheet value. Therefore, even if the market no longer grants the previous high premiums, as long as Bitcoin prices do not fall further, the process of “normalization” of its stock price toward net asset value—reassessing at $450-$500—remains feasible. This is more a process of value discovery than pure speculation.

MSCI’s “Judgment Day”: The Sword of Damocles Hanging Overhead

Beyond Bitcoin’s price itself, the biggest short-term uncertainty for Strategy is the upcoming classification decision by global index giant MSCI on January 15. MSCI will determine whether companies like Strategy, which hold digital assets as core treasury assets, should be classified as “investment funds.” This decision sounds technical but could have immediate and large-scale market impacts.

If MSCI rules that Strategy does not meet the criteria for traditional stocks and classifies it as an investment fund, the consequences will be severe. The company could be removed from major MSCI stock indices. For passive funds tracking these indices (such as ETFs and institutional portfolios), this would force selling of MSTR holdings to maintain index consistency. JPM estimates that forced outflows could reach as high as $2.8 billion. This would exert enormous selling pressure, likely suppressing the stock price in the short term and increasing volatility.

This potential risk is one of the main reasons why MSTR’s current trading discount relative to its Bitcoin net asset value is so deep. The market is pricing in this “index exclusion” risk. When calculating fair value, investors must discount part of the liquidity and uncertainty premiums. The January 15 decision is thus not just a classification issue but a major liquidity event catalyst. If the outcome is positive—MSCI maintains its current stock classification—the uncertainty weighing on the stock will be lifted, and the discount correction logic will gain momentum. Conversely, if the outcome is negative, the stock could face further short-term downside, testing its support levels.

This event also highlights the challenges and rules-matching issues faced when traditional finance intersects with emerging crypto assets. As an innovative listed company, Strategy’s business model is at the forefront of regulation and classification definitions, inevitably facing “identity verification” crises. Its final outcome will not only affect itself but also set a precedent for others.

Technical Structure: Bull-Bear Battle at Key Support Levels

From a trading perspective, after months of a “lower lows” downtrend, MSTR appears to be completing a long downward cycle, forming a temporary bottom around $150-$157. This zone now acts as a baseline for a potential rebound. Support here suggests that the selling pressure may temporarily weaken, unable to further expand. As of the latest, MSTR trades at $158.49, up 3.4 intraday, showing initial signs of bouncing from support.

Technical indicators also support a bullish outlook. The Relative Strength Index (RSI) is stable around 36, still in the weak zone but above oversold levels. This indicates that selling momentum is waning. RSI flattening suggests the market is building a bottom rather than simply continuing a downtrend. However, technical analysis must be combined with fundamental risks. A decisive break below the $150 support would delay or invalidate the current rebound, possibly opening further downside.

MSTR key resistance levels overview

Current price and support: $158.49, core support zone $150 - $157

First resistance: $200.45 (previous consolidation center, potential initial volatility)

Second resistance: $242.29 (another technical reaction point, rebound momentum may pause here)

Core resistance: $342.50 (historical dense trading zone and key boundary, a breakout indicates structural recovery)

High resistance: $430.93 (near historical highs, strong technical selling pressure)

Ultimate target zone: $456.47 to $500 (structural resistance upper boundary and long-term analyst target)

If bullish momentum persists, the first upside target for MSTR is around $200.45, a previous pivot point likely to trigger volatility. Sustained above this level would confirm increasing demand. Next, the price could aim for $242.29, another potential pause point for rebound momentum. If buyers and long-term holders defend this line successfully, the next key challenge is the $342.50 resistance. This level, due to historical consolidation and chip distribution, is a major source of volatility. A confirmed breakout and stabilization above $342.50 will signal a structural recovery, not just a technical rebound.

Long-term, overcoming these resistances could push MSTR to challenge the $430.93 high, which previously caused a pullback and carries higher volatility risk. Beyond that, the final long-term structural barrier is at $456.47. A clear breakout here would open the way for the stock to accelerate toward Wall Street’s $500 target. This path outlines a multi-battle scenario from key supports, gradually conquering resistance fortresses.

What is Strategy: Why It’s Seen as a Bitcoin Proxy Stock

To deeply understand MSTR’s price volatility logic, one must first grasp the fundamental transformation of Strategy. Originally founded in 1989, Strategy was a traditional enterprise business intelligence software company. However, since August 2020, under the aggressive strategy of co-founder and executive chairman Michael Saylor, the company underwent a complete transformation—shifting its core treasury strategy from holding cash to large-scale Bitcoin purchases and holdings.

Since then, Strategy has ceased to be viewed merely as a software company and more as a “Bitcoin holding company” or “alternative to Bitcoin spot ETFs”. Its stock price correlation with Bitcoin has become extremely high because most of its value is anchored in Bitcoin assets on its balance sheet. Investors buying MSTR stock are essentially gaining indirect Bitcoin exposure through a traditional stock account, while also bearing the company’s operational, leverage, and governance risks. This unique positioning allows it to achieve far greater gains than Bitcoin itself during bull markets (due to leverage and equity premiums), but also faces larger corrections in bear markets (digesting premiums and leverage).

Michael Saylor has become one of Bitcoin’s most prominent evangelists. His company’s strategies—including issuing bonds and convertible notes—are tightly centered on “accumulating more Bitcoin.” Recent data he posted on X shows that the 30-day average trading volume to market cap ratio of MSTR is as high as 7.2%, far exceeding giants like Tesla, Nvidia, Apple. This underscores its stock’s trading characteristics as a high-volatility, high-attention “Bitcoin proxy asset.” Saylor explains: “Bitcoin makes Strategy more liquid.” This insight reveals how deeply its corporate value is tied to the Bitcoin ecosystem.

Understanding MSTR’s “Discount” and “Premium” Mechanisms Relative to Bitcoin

The most critical concept in MSTR’s valuation framework is the “premium” or “discount” relative to its Bitcoin net asset value. This is a dynamic indicator reflecting market sentiment, leverage risk, and growth expectations.

Net Asset Value (NAV) Calculation: The basic principle is to multiply the total Bitcoin holdings by the real-time Bitcoin price to get total Bitcoin asset value. Then subtract all liabilities (mainly bonds issued for Bitcoin purchases) to derive net asset value. Finally, divide the company’s total market cap by the per-share net asset value to determine whether the stock is trading at a premium or discount to NAV.

Premium Period: During Bitcoin bull markets or highly optimistic periods, MSTR’s stock often trades well above NAV. This premium reflects the market’s willingness to pay extra for factors like: 1. Active management expectations—believing the company can leverage financing to acquire more Bitcoin in a bull run. 2. Convenience premium—paying for easy access to Bitcoin via traditional stock accounts. 3. Leverage amplification—its leveraged Bitcoin holdings can generate higher returns in a bull market.

Discount Period: Conversely, when the stock trades below NAV, it usually occurs in Bitcoin bear markets or when specific risks emerge (like the current MSCI classification risk). The discount reflects market’s “risk premium” to offset concerns such as: 1. Leverage risk—worries that Bitcoin declines will worsen financial strain. 2. Operational risk—the value of its traditional software business is ignored or undervalued. 3. Structural risk—such as potential index exclusion leading to liquidity discounts. 4. Management risk—skepticism about Saylor’s aggressive strategies.

Currently, about 25% discount offers Wall Street analysts an attractive margin of safety and valuation repair space. Their $500 target essentially assumes a “discount convergence” or even a reversion to a “moderate premium.” Understanding this mechanism is key to grasping the investment logic behind MSTR stock.