MSTR Earnings Preview: Is Strategy’s Strategy Sustainable?

In February 2025, the company formerly known as MicroStrategy rebranded as Strategy [MSTR]. This move was intended to reflect the fact that its principal business is now its bitcoin strategy.

How does that strategy work? Is it paying off for the firm? What can investors expect from today’s quarterly earnings call? Read on to find out. 

How Strategy Got its Strategy

Based in Virginia, Strategy describes itself as “the world’s first and largest Bitcoin Treasury Company”. But this was not always its core focus. 

The company made its first bitcoin purchase in August 2020, citing diminishing cash yields and broader macroeconomic concerns.

On July 29, 2025, Strategy closed its IPO of 28 million shares of Series A Perpetual Stretch Preferred Stock [STRC] at $90 per share, raising gross proceeds of $2.52bn — the largest US IPO of 2025 and one of the biggest crypto-related offerings in recent years. STRC was set to begin trading on Nasdaq around July 30.

Net proceeds of $2.47bn were used to purchase 21,021 bitcoins at an average price of $117,256. As of July 29, Strategy holds 628,791 BTC, acquired for a total of $46.8bn at an average cost of $73,227 per bitcoin.

All in all, Strategy’s strategy would seem to be paying off. 

MSTR stock is up 36.27% year-to-date. However, it is up a staggering 3,250.25% over the last five years. Much of this growth has occurred since the start of 2024, when its bitcoin strategy really started to capture investors’ attention.

Q2 Earnings: What to Expect

The firm still nominally pursues its core business of providing artificial intelligence-powered analytics software, which generated $111.1m in revenue in Q1 2025. However, this figure shows how insignificant Strategy’s actual product is relative to its bitcoin holdings, and why analysts will be paying attention to the Q2 earnings call mainly for signs of the success and sustainability of its bitcoin strategy.

TD Cowen increased its price target for MSTR stock from $590 to $680 on July 14, maintaining a ‘buy’ rating. The target represents an upside of 72.3% from the July 29 close of $394.66 

Similarly, Cantor Fitzgerald analyst Brett Knoblauch recently increased the price target for MSTR stock to $680 from $614 and reaffirmed a ‘buy’ rating. Knoblauch thinks that the firm’s bitcoin hoard is unlikely to be matched by any other entity. Moreover, assuming that it acquires some $20bn of bitcoin every year, it will reach 1 million BTC in three years. 

“If BTC is going to $1m, which we think is highly likely at some point in the future, MSTR could be one of the largest companies in the world,” Knoblauch argued.

When it comes to the earnings call on July 31, analysts’ main focus will be on its bitcoin holdings, unrealized gains under fair value accounting, and updates on the company’s capital deployment strategy, including recent equity and preferred stock offerings. Forward guidance on yield and projected dollar gains will be key to assessing the sustainability of its bitcoin strategy.

BTC Treasury Plays: MSTR vs MTPLF vs SMLR

As OPTO recently outlined on the Foresight Substack channel, a number of companies have adopted Strategy’s bitcoin strategy, from video games retailer GameStop [GME] to Alliance Resource Partners [ARLP], the second-biggest coal producer in the eastern US.

Let’s compare the performance of MSTR stock to two others that have likewise doubled down on bitcoin. Such a comparison may be revealing as to how replicable that strategy is, and the extent to which Strategy really is in an unassailable position, as Cantor’s Knoblauch thinks. 

Japanese hotel management firm Metaplanet [MTPLF] has added 780 BTC to its treasury, raising total holdings to over 17,000 BTC, valued above $2bn. The Tokyo-listed company is expanding its bitcoin position ahead of a key 2026 target, using funds from capital markets and operating income. 

In July, it issued over 23 million shares via stock acquisition rights in three tranches, using the proceeds to redeem corporate bonds and finance further bitcoin purchases, according to a corporate notice released on July 28.

MTPLF stock is up a healthy 241.74% year-to-date.

Semler Scientific [SMLR] is a California-based medtech. It has been acquiring bitcoin since May 2024 and currently holds 5,021 BTC.

Earlier in July, Cantor Fitzgerald initiated coverage on Semler Scientific with an ‘overweight’ rating and a $61 price target, an upside of 66.67% from the July 29 close. The firm notes that Semler was the second US company to adopt a bitcoin treasury strategy. Unlike Strategy, which raises capital specifically to buy bitcoin, Semler is using surplus cash from its balance sheet. Cantor sees the stock’s risk/reward as compelling, calling it one of the most undervalued bitcoin treasury plays. 

SMLR stock is down 32.22% year-to-date, although it is up 9.65% over the past 12 months. 

Source: Yahoo Finance

Comparing MSTR, MTPLF and SMLR suggests that bitcoin acquisition may not be a magic bullet. The relative success of the three firms may also be connected to their respective sizes. Put very simply, the more cash you have, the more crypto you can buy and the more successful the strategy can prove.

Nonetheless, as Cantor points out, there may be an argument for getting in on the ground floor with a cheaper, smaller-cap stock that is committed to a bitcoin treasury strategy — particularly if you are of the opinion that bitcoin’s rise can continue.

MSTR Stock: The Investment Case

Indeed, that is very much the crux of the matter. Investing in Strategy or any other bitcoin play essentially comprises a bet on the future performance of bitcoin. Let’s unpack exactly what that means. 

The Bull Case for MSTR Stock

Strategy offers leveraged exposure to bitcoin, making it a unique vehicle for institutional investors seeking to benefit from long-term crypto adoption. The company has demonstrated consistent execution in raising capital — through equity, debt and preferred stock — to aggressively expand its bitcoin holdings. Its inclusion in the Nasdaq 100 and leadership under Michael Saylor boosted its visibility and credibility in the market. As bitcoin matures into a mainstream asset class, MSTR could see outsized upside relative to spot BTC performance.

The Bear Case for MSTR Stock

Strategy’s business model is heavily reliant on bitcoin appreciation, exposing shareholders to significant volatility and downside risk in crypto markets. Its strategy of issuing debt and equity to fund BTC purchases dilutes shareholders and increases financial leverage. The lack of on-chain reserve verification and the concentration of value in a single asset raise transparency and governance concerns. If bitcoin stalls or enters a prolonged bear cycle, MSTR’s valuation could suffer disproportionately.

Conclusion

MicroStrategy remains a high-risk, high-reward proxy for bitcoin, with performance closely tied to crypto market cycles. Investors must weigh the company’s bold treasury strategy against the structural risks of leverage, dilution and asset concentration.