Strategy Shares Face Sharp Downgrade as Analyst Slashes Price Target

Strategy US5949724083

A leading Wall Street firm has delivered a severe reassessment of Strategy, formerly known as MicroStrategy, fundamentally questioning the premium investors have been willing to pay for its substantial Bitcoin holdings. The move signals a dramatic shift in sentiment toward what was once considered a premier crypto investment vehicle.

On December 5, analysts at Cantor Fitzgerald executed a deep cut to their outlook for the company. The firm reduced its 12-month price target for Strategy shares from $560 to $229, representing a downward revision of approximately 60 percent. While Cantor Fitzgerald maintains a formal "Overweight" rating, the rationale behind this sharp adjustment is significant.

The re-evaluation stems primarily from lowered expectations for future capital raises. The analysts drastically scaled back their forecast for capital proceeds from an original $22.5 billion to just $7.8 billion. Concurrently, they note a growing investor unwillingness to pay the historical premium on the company's net asset value (NAV). In their valuation model, this premium multiple has been reduced from 1.6 to 1.25.

Soaring Valuation Meets Operational Reality

Amid this financial recalculation, the company's management is attempting to bolster its core business operations. An expanded partnership with HCLTech aims to globally scale its "Strategy Mosaic" AI platform, an initiative designed to lessen dependence on Bitcoin's price movements. CTO Ponna Arumugam has highlighted the platform's technological progress, yet fundamental metrics paint a contrasting picture.

A massive gap exists between Strategy's market valuation and its operational performance. Against a market capitalization exceeding $50 billion, the company generated revenues of just $354 million in the first nine months of 2025. This results in a price-to-sales ratio well above 100—a level considered exceptionally high even for aggressive growth technology stocks.

Technical and Fundamental Pressure Converge

This fundamental disparity is reflected in the share price performance. Closing at €153.80 on Friday, the stock trades only slightly above its 52-week low of €147.65. Since the start of the year, it has recorded a loss of more than 47 percent. The price has fallen decisively below both its 100-day and 200-day moving averages, a technical confirmation of a sustained long-term downtrend.

Investors now face a complex situation. The shrunken premium on the Bitcoin treasury signals increasing risk sensitivity in the market. Whether the company's AI initiatives can generate significant revenue quickly enough to justify the lofty valuation attached to its non-crypto assets remains a key question for upcoming quarterly reports to answer.