Strategy, formerly called MicroStrategy before its rebrand, is the largest corporate holder of bitcoin. Therefore, the stock's price often moves with the price of the cryptocurrency. So, with the newest endorsement from President Donald Trump and a digital assets summit occurring this week, is Strategy stock a buy, sell or hold?
Strategy stock rebounded sharply with a nearly 23% gain in two days after a two-week sell off. The stock is climbing back toward its 10-week-moving average after undercutting it in late January.
Company co-founder Michael Saylor has been invited to attend the Digital Assets Summit at the White House Friday. Attendees are expected to discuss how digital assets can be incorporated into the financial system as well as cryptocurrency policies and regulations.
Bitcoin prices were reinvigorated after Trump made comments on his Truth Social account Sunday about a U.S. crypto strategic reserve.
Bitcoin prices had tumbled to a low around $83,000 last week. Investors seemed to have lost their postelection enthusiasm for the cryptocurrency. Prices then felt more pressure in sympathy with cryptocurrency ethereum, after crypto exchange Bybit experienced a $1.5 billion ethereum hack during a scheduled transfer Feb. 21.
Bitcoin is climbing back and topped $90,000 Wednesday.
Despite the connection to bitcoin, Strategy is primarily a data analytics and security software provider. It uses artificial intelligence in its reporting tools, interactive dashboards and platform. It serves the retail, financial services, government and health care industries.
Crypto Gets Backing From Trump
On Jan. 21, Trump's first full day in office, the Securities and Exchange Commission announced a new crypto task force.
President Trump issued a crypto executive order on Jan. 23, mentioning a "national digital asset stockpile."
Before his inauguration, Trump launched a new Solana-based cryptocurrency called Official Trump, or $TRUMP. The coin is intended to be a show of support for cryptocurrency and not an investment.
Currently, the U.S. government already owns more than 207,000 bitcoins, mostly seized from criminal activities.
Strategy Raises $20 Billion For Bitcoin
Strategy has been rapidly accumulating the cryptocurrency and boosted its bitcoin holdings to 499,096 as of Feb. 25.
In its fourth-quarter earnings report, Strategy said it is ahead of schedule in its plan to raise $42 billion in capital the next three years. The proceeds are to be used to buy more bitcoin. The company already has raised $20 billion.
"We intend to fund further bitcoin acquisitions primarily through issuances of class A common stock and a variety of fixed-income instruments, including debt, convertible notes and preferred stock," said a Strategy prospectus filed Jan. 27.
In January 2025, Strategy filed to issue 7.3 million shares of preferred stock as well as completed a $2.0 billion offering of senior in notes in late February.
Strategy is one of only a handful of Bitcoin Treasury Companies, meaning it uses the cryptocurrency as a treasury holding vs. traditional assets.
Bitcoin's recent price run began in November following Trump's presidential election.
Following the cryptocurrency's climb, Strategy stock also bolted to new highs in November. Shares have yet to return to their peak of 543 set on Nov. 21; they currently trade around the 255 level.
Bitcoin prices first broke the $100,000 milestone in early December but they quickly retreated below the round number. Bitcoin prices revisited the $100,000 mark in early January and topped $109,000 on Jan. 20.
ETFs Spring Up Around Strategy
Strategy stock is showing up in more exchange traded funds with large weightings in crypto-focused funds.
Strategy is the largest holding in the Bitwise Crypto Industry Innovators ETF at around 9.5% weighting. This fund corresponds to the Bitwise Crypto Innovators 30 Index.
New ETFs are also being created around the stock itself and its volatility. For instance, there are inverse, leveraged and option funds tied to the stock's performance. Keep in mind, many of these are riskier to trade than regular ETFs.
On the bullish side are T-REX 2X Long MSTR Daily Target ETF and Defiance Daily Target 2X Long MSTR ETF. Both are leveraged short-term products that strive for 200% of the daily price movement of Strategy stock.
And on the bearish side are T-REX 2X Inverse MSTR Daily Target ETF and Defiance Daily Target 2X Short MSTR ETF, which aim for daily results twice the inverse daily performance of Strategy.
YieldMax MSTR Option Income Strategy ETF is an actively managed fund that seeks to generate monthly income by selling call options on Strategy stock.
Strategy Stock Follows Bitcoin Prices
Strategy has been volatile since the election. Even with the recent pullback, the stock remains extended from a long, late-stage base with a 200 buy point.
The stock found support at its 200-day moving average Friday. But its relative strength line has been dropping, which is a sign of weakness.
The stock hit an all-time high Nov. 21, before reversing to close 16.2% lower the same day in heavy volume.
Shares have retreated around 43% from the high. After bouncing off the 10-week line the week ended Dec. 20, Strategy sank more than 8% below the line Dec. 30, triggering a sell signal.
Shares have gained around 5% so far this year despite volatile action. This follows the stock's 358% gain in 2024.
Strategy Losses Continue But Look To Dwindle
Strategy reported a significant loss and missed fourth-quarter sales estimates Feb. 5. The same day it announced its new brand and that it will be doing business as Strategy.
"Strategy is innovating in the two most transformative technologies of the twenty-first century – bitcoin and artificial intelligence," Strategy Chief Executive Phong Le said in the brand makeover press release.
The company's sales have declined for five straight quarters. Even more alarming is its four consecutive quarters of large losses.
Analysts expect continued — but narrower — losses over the next four quarters. Sales forecasts show low single-digit growth over the same time period.
Is Strategy Stock A Buy, Sell Or Hold?
The bottom line: Strategy is under its 10-week line and not in a base, so it is currently not a new buy. But investors could re-enter or add to a profitable existing position if the stock makes a solid move above the 10-week line. Otherwise, investors should wait for a new base to form.
Investors should have your risk management strategy in place and be ready to sell if the stock goes 7% below their buy point.
Investors can check out IBD Stock Lists and other IBD content to find dozens of the best stocks in addition to Strategy.
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