MicroStrategy’s stock has surged nearly 500% this year, making it a strong contender for inclusion in the Nasdaq 100 index, which will be reshuffled soon. The company, primarily known for its software, has shifted its focus to Bitcoin, holding approximately 400,000 bitcoins valued around $42 billion. This shift came as its software revenue declined, and now it controls over 2% of the total Bitcoin supply. Despite facing three consecutive quarterly losses, analysts see potential for further growth, with all brokerages rating it “buy” or higher. However, some experts argue that its income source resembles that of a financial firm, which could affect its eligibility for the index.
By Medha Singh
MicroStrategy, the prominent software company known for its substantial bitcoin investments, is on track for potential inclusion in the Nasdaq 100 index, as its shares have soared nearly 500% this year. With a recent surge of 6%, the company’s Market capitalization has reached $90 billion, making it a strong contender for the tech-centric index in the upcoming reshuffle.
The boost in MicroStrategy’s fortunes is closely tied to the explosive rise in bitcoin, which reached the $100,000 milestone recently, doubling its value within this year. Investors are optimistic that the incoming administration under President-elect Donald Trump will foster a favorable environment for cryptocurrencies.
If MicroStrategy secures a spot in the Nasdaq 100, it could encourage more investment firms to include its stock in their portfolios, given that its bitcoin holdings are valued at around $42 billion. This possible move may also increase the attractiveness of exchange-traded funds (ETFs) focused on bitcoin, particularly among younger investors.
To qualify for the Nasdaq 100, companies must meet specific criteria: they must rank among the top 100 by Market capitalization, have a daily trading volume of at least 200,000 shares, and not belong to the financial sector. Art Hogan, a Market strategist, believes that MicroStrategy meets all these requirements as the index is set to be reassessed in December.
It’s also notable that other companies like Palantir, which has quadrupled its Market value to $160 billion this year, may join the Nasdaq 100, while Super Micro Computer could be at risk of being removed due to its recent filing delays.
While MicroStrategy’s bitcoin-centric strategy has raised eyebrows, analysts are divided on its long-term viability. Some argue that the company’s rapid Market valuation is driven more by its bitcoin investments than its software operations. Nevertheless, Wall Street remains optimistic, with every brokerage covering MicroStrategy rating it as a “buy” or higher, indicating potential for further growth.
In summary, MicroStrategy’s possible ascension into the Nasdaq 100 highlights the deepening interconnection between technology companies and the cryptocurrency Market, marking another chapter in the ongoing bitcoin saga.
Tags: MicroStrategy, Nasdaq 100, Bitcoin, Cryptocurrency Investment, Stock Market News
What is MicroStrategy’s bitcoin-powered surge?
MicroStrategy’s bitcoin-powered surge refers to how the company’s investment in bitcoin has significantly increased its stock price. This rise is getting MicroStrategy closer to being listed in the Nasdaq 100, which includes the top 100 companies on the Nasdaq stock exchange.
Why is being part of the Nasdaq 100 important for MicroStrategy?
Being part of the Nasdaq 100 is important because it shows that MicroStrategy is one of the leading companies in the Market. It can attract more investments and give it more credibility among investors.
How has bitcoin affected MicroStrategy’s financial performance?
Bitcoin has had a big positive impact on MicroStrategy’s financial performance. As the value of bitcoin rises, so does the value of MicroStrategy’s holdings, leading to higher stock prices and more investor interest.
Is MicroStrategy planning to invest more in bitcoin?
Yes, MicroStrategy has indicated that it plans to continue investing in bitcoin. The company believes that bitcoin can help grow its assets and improve overall performance.
What risks does MicroStrategy face with its bitcoin investments?
MicroStrategy faces risks like the volatility of bitcoin prices, regulatory changes, and Market competition. If bitcoin prices fall, it could negatively impact the company’s stock and overall value, which may worry some investors.
