TD Cowen says Strategy’s equity-to-Bitcoin loop justifies NAV premium despite risks, maintains buy rating

Strategy, Michael Saylor’s Bitcoin treasury firm, finished the second quarter of 2025 with 69,140 Bitcoin added to its balance sheet, handily beating TD Cowen’s 66,000-coin estimate and extending the firm’s 2025 $BTC yield to almost 20%, the broker said in a research note on Monday.

The latest batch, as of July 1—4,980 $BTC bought last week at an average price of $106,801—lifted Strategy’s holdings to 597,325 Bitcoin, worth roughly $63 billion. Chairman Michael Saylor funded last week’s purchase with three active at-the-market programs: $519.5 million from common-stock sales, less $45 million retained for dividend payments, and nearly $59 million combined from convertible and senior-preferred offerings. Both preferred classes, launched this year at $80 and $85, still trade above $104, signaling demand for levered Bitcoin exposure that carries minimal coupon expense before conversion.

Strategy shares continue to trade at a significant premium, about 63%, to net asset value, a markup TD Cowen calls reasonable because every equity sale immediately converts into additional $BTC per share. Cowen analysts Lance Vitanza and Jonnathan Navarrete attribute the premium to three factors: continued equity issuance at prices well above NAV, growing demand for the fixed-income stack that minimizes dilution, and the stock’s role as a popular proxy for spot Bitcoin.

Yet, risks remain. Cowen noted that Bitcoin volatility could erase mark-to-market gains. It also said regulators could target corporate crypto treasuries, and the market may compress Strategy’s premium. Even so, the firm argues that Saylor’s playbook—selling shares, buying coins, repeating—continues to build intrinsic $BTC per share faster than Bitcoin rises on its own.

Strategy’s stock has climbed 34.7% year-to-date, Yahoo Finance data shows. Cowen analysts expect momentum to continue so long as the company can raise capital at favorable terms and Bitcoin stays on its projected path to $128,000 by December 2025, the price embedded in the broker’s valuation.

The investment bank left Strategy’s buy rating and $590 price target unchanged—about 45% above Monday’s $404.23 close—but raised their long-range Bitcoin accumulation assumption. They now project that Strategy will control just over 850,000 $BTC by the end of 2027, roughly 4.1% of the 21 million bitcoins that will ever exist. Their model also nudged the firm’s 2025 Bitcoin yield to 26.1% and year-end $BTC dollar gains to $11.9 billion.

According to TD Cowen, Strategy’s potential inclusion in the S&P 500, clearer U.S. tax guidance, and a broadening institutional bid for $BTC represent catalysts for further acceleration.