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The note, authored by analyst Lance Vitanza and associate Jonnathan Navarrete, maintained a Buy rating on the stock.
The $5 target increase was driven by upward revisions to TD Cowen's 2026 $BTC Yield and $BTC Dollar Gain estimates after treasury activity since the last earnings call surpassed earlier models.
Preferred equity issuance has dominated Strategy's capital raises in the second quarter, with roughly $1.95 billion raised versus minimal common equity issuance. Nearly all proceeds have been deployed directly into bitcoin purchases, per TD Cowen.
As a result, Strategy has already acquired more bitcoin ($BTC) partway through Q2 than TD Cowen had modeled for the entire quarter.
The firm now forecasts roughly 100,000 $BTC purchased in Q2, lifting full-year $BTC Yield projections to 19.8% from 18.2% and full-year $BTC Dollar Gain estimates to $15.16 billion from $13.89 billion.
Bitcoin per 1,000 fully diluted shares reached 2.21x as of May 17, up from 1.95x at the end of 2025. TD Cowen called the trajectory a core validation of Strategy's financing model, with bitcoin holdings continuing to outpace share issuance even as dilution rises.
Cleaning up the balance sheet
The second driver of the target raise was Strategy's repurchase of roughly $1.5 billion of out-of-the-money convertible notes at an approximately 8% discount to face value.
TD Cowen argued the transaction reduces fully diluted share exposure while improving credit quality and lowering future refinancing risk. The firm called it an important signal of financial flexibility.
Strategy now holds 843,738 $BTC — more than 4% of the 21 million bitcoin supply cap — after acquiring 24,869 $BTC for roughly $2.01 billion from May 11 to May 17, the largest single-week purchase this year since a 34,164 $BTC buy in April, as The Block reported on Monday.
TD Cowen's $400 price target applies a 3x multiple to 2026 $BTC Dollar Gain of $15.16 billion, then adds projected year-end bitcoin holdings of $132.9 billion and subtracts $3.5 billion in debt and $15.5 billion in preferred equity obligations — arriving at roughly $400 per fully diluted share.
MSTR closed at $166.63 on Monday, down roughly 63% from its 52-week high of $455.90, leaving TD Cowen's target implying more than 140% upside from current levels.
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