Strategy Inc. finds itself at a strategic crossroads, prompting a significant reassessment from Wall Street. The catalyst for this reevaluation stems from the company’s recent deployment of a substantial $747.8 million capital raise completed in the week ending December 21, 2025. Contrary to widespread market expectations, not a single dollar of this fresh capital was allocated to purchasing Bitcoin. Instead, the entire sum has been added to the corporate treasury, bolstering cash reserves to approximately $2.19 billion.
This pivot from an aggressive digital asset accumulator to a more conservative balance sheet manager has directly triggered a wave of analyst downgrades.
Analyst Reactions and Revised Forecasts
The decision to fortify liquidity, intended to cover debt servicing and dividend obligations for up to 24 months, has been met with skepticism by market experts concerned about diminished growth prospects.
- Cantor Fitzgerald executed a sharp reduction in its price target on December 5, slashing it from $560 to $229.
- TD Cowen has maintained its $500 target but explicitly highlighted the growing divergence between the company’s share price and the underlying value of its Bitcoin holdings.
Strategy’s core Bitcoin treasury remains unchanged at 671,268 BTC. With Bitcoin trading between $88,000 and $90,000, this hoard carries a market value of roughly $60 billion.
The Vanishing Premium: A Shift in Investor Sentiment
The market’s changing perception is starkly visible in the year-to-date performance. Strategy’s shares have shed approximately 40% of their value, while Bitcoin itself has declined by only about 4% over the same period. This growing performance gap indicates that investors are increasingly unwilling to pay a significant premium over the firm’s net asset value in Bitcoin.
Should investors sell immediately? Or is it worth buying Strategy?
The rationale is clear: Strategy was previously viewed by many as a leveraged bet on Bitcoin. Shareholders invested with the expectation that management would continuously and aggressively expand the Bitcoin portfolio. That core investment thesis is now on hold. While the $2.19 billion war chest reduces insolvency risk during volatile crypto market cycles, it simultaneously dampens the aggressive growth narrative that once fueled the stock.
All Eyes on the Upcoming Quarterly Report
The path forward will become clearer when Strategy releases its next quarterly results on February 3, 2026. This report is anticipated to provide critical insights into whether the pause on Bitcoin acquisitions is temporary or represents a new long-term operational norm.
Investors will be looking for management to address three pivotal questions:
1. Is the current defensive posture a permanent strategic shift?
2. What is the intended use for the massive cash reserves—potential share buybacks, debt reduction, or another purpose?
3. How does leadership justify the stock’s shrunken valuation premium in light of this changed strategy?
Until these questions are answered, the equity is likely to remain volatile. From a technical analysis perspective, the $160 level is seen as a key psychological support zone. A sustained break below this threshold could potentially trigger further selling pressure.
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