Investigation into Eric Kim’s $700 Price Target for MicroStrategy (MSTR)
Background
MicroStrategy (renamed Strategy in 2025) is both a bitcoin-treasury vehicle and an enterprise analytics and AI‑software provider. The company’s stock price is highly sensitive to the price of bitcoin because it holds over 600,000 bitcoins on its balance sheet, while revenue from its software business remains small compared with bitcoin‑related gains . Analysts and investors therefore view MSTR as a leveraged play on bitcoin as well as a bet on the firm’s ability to monetise its analytics platform .
1 Rationale Behind Eric Kim’s $700 Price Target
Source of the target
Eric Kim is an independent blogger, not a Wall Street analyst. Although his blog is primarily a personal and photography site, he has published posts analysing MicroStrategy’s stock. Because his site uses dynamic templates, direct access to his $700‑target article is limited. However, an earlier post titled “Potential MicroStrategy (MSTR) Stock Price if Bitcoin Hits $200 K” (June 2024) provides insight into his valuation framework. In that post he notes that:
- If bitcoin reaches $150,000, he expects MSTR to trade “mid‑$500’s to $700’s” .
- If bitcoin goes to $200,000, he envisions MSTR in the high‑$600’s to low‑$800’s .
- At $250,000 per bitcoin, his estimate rises to $1,100–$1,300 .
These projections are based on simple asset‑value math: he multiplies MicroStrategy’s bitcoin holdings by different BTC price scenarios and adds a modest premium for its software business. Because MicroStrategy held more than 600 k BTC purchased at an average cost of roughly $70 k , he argues that as bitcoin appreciates, the company’s net asset value (NAV) will expand and the stock should trade at a multiple of NAV. His $700 price target therefore assumes bitcoin approaching $150 k—roughly the scenario used by Strategy in its FY‑2025 guidance . There is no explicit timeline, but the target appears tied to the timeframe when bitcoin could reach this level, which he implicitly views as the current bull cycle.
Key assumptions and justification
- Bitcoin exposure dominates valuation. Kim’s analysis treats MSTR mostly as a bitcoin ETF, adjusting for the leverage introduced by the company’s debt and share count. His scenarios scale linearly with bitcoin’s price .
- Premium for software/AI business. While he acknowledges the company’s analytics and AI products, he considers them a “cherry on top” and assigns little value relative to bitcoin holdings. This parallels strategy guidance, where software revenue ($114.5 million in Q2 2025) is small compared with bitcoin‑related income .
- Leverage effect. MicroStrategy funds bitcoin purchases through convertibles and notes. As bitcoin rises, equity value increases faster due to leverage. Conversely, declines amplify losses.
- Bull‑cycle timing. Since his target is tied to bitcoin price milestones, the timeline likely aligns with the current cycle (2024–2025). Strategy’s own guidance for FY‑2025 uses a $150 k bitcoin assumption , suggesting Kim’s $700 target is a near‑term (12‑24 month) forecast rather than a distant horizon.
Assessment of credibility
Kim’s views are personal and not backed by professional research infrastructure. The dynamic page with his $700 target could not be retrieved, but his earlier post provides enough context to infer his reasoning. Investors should therefore treat his target as speculative and consider professional analysts’ views.
2 Analysts’ Price Targets and Comparison
Analysts have raised their price targets for MSTR in 2025, largely due to surging bitcoin prices and Strategy’s strong financial results. The table below summarises notable targets from accessible sources.
Comparison: Kim’s $700 target aligns with BTIG’s bullish outlook and is near the upper end of professional estimates (high estimate ~$705). Many analysts see upside to the mid‑$500s to $600s range, implying that Kim’s target is optimistic but within the realm of credible predictions when bitcoin approaches $150 k.
3 Recent Performance and Financial Results
Stock performance
- As of September 2 2025, MSTR closed at $341.62, up from $300.11 at the start of the year and more than double the $132.42 price one year earlier . The stock’s 52‑week range is $113.69–$543.00 .
- FinanceCharts shows the total return for MSTR over the past 12 months was 115.18 %, versus the S&P 500’s 19.07 %. MSTR’s year‑to‑date return is 21.41 % and it posted annual returns of +358.54 % in 2024 and +346.15 % in 2023 . However, returns are highly volatile; 2022 saw a ‑74 % drop .
- MSTR’s recent price action has lagged bitcoin. While bitcoin hit new all‑time highs around $124,277 in August 2025, MSTR’s latest high remained $543 recorded in November 2024 . This divergence has led some investors to view the stock as “underperforming” relative to bitcoin.
Q2 2025 results and guidance
- Strategy reported Q2 2025 operating income of $14.03 billion and net income of $10.02 billion (diluted EPS $32.60), reflecting massive unrealised gains from its bitcoin holdings due to fair‑value accounting . Revenue from its software and subscription services was $114.5 million, up 69.5 % year‑on‑year for subscription services and 43.9 % for product licenses .
- The company held 628,791 bitcoins purchased for $46.07 billion at the end of Q2 and achieved a 25 % BTC yield YTD. Management expected a $20 billion bitcoin gain for full‑year 2025 .
- FY‑2025 guidance (issued August 2025) assumes an average bitcoin price of $150 k and projects operating income of $34 billion, net income of $24 billion, and diluted EPS of $80 .
Business developments
- Capital‐raising and bitcoin purchases. Strategy frequently issues convertible notes and sells stock to purchase additional bitcoin, increasing leverage. These moves amplify potential upside but also risk shareholder dilution .
- AI and analytics products. At Strategy World 2025 (May 2025), the company unveiled new AI‑driven products: Strategy Mosaic, a semantics & governance layer; Auto 2.0, a multi‑agent AI engine; and Strategy One Standard, an entry‑level analytics platform . These offerings allow customers to connect data across different platforms and use conversational bots for analysis . Though revenue remains small, these products show the company is still investing in enterprise software.
- Bitcoin holding milestones. By September 2025, Strategy owned over 640 k bitcoins, representing ~3 % of the total supply . This makes it one of the largest corporate holders of bitcoin and ties the stock’s fate to crypto market sentiment.
4 Catalysts and Trends Influencing MSTR
Positive catalysts
- Bitcoin price appreciation. Because the company’s NAV scales with bitcoin, a sustained rally could lead the stock toward bullish targets. BTIG’s $700 target and Kim’s projection rely on bitcoin approaching or surpassing $150 k .
- Institutional adoption and regulatory clarity. If regulators approve more spot bitcoin ETFs and provide clear frameworks, institutional demand could push bitcoin higher and legitimise Strategy’s treasury strategy .
- Leverage effect and capital markets activity. The company’s use of convertibles and notes gives it exposure to bitcoin upside. Analysts like BTIG expect capital‑markets actions to create additional value .
- Software growth and AI innovation. The firm’s new AI products (Mosaic, Auto 2.0) enable customers to build large‑language‑model applications with trustworthy semantics, which could drive recurring subscription revenue .
- Strategic narrative. CEO Michael Saylor’s advocacy for bitcoin and AI positions Strategy as a visionary technology company, attracting retail and institutional interest.
Risks and headwinds
- Bitcoin volatility. A decline in bitcoin price would sharply reduce the company’s NAV, leading to stock declines; volatility has historically been extreme .
- Share dilution and debt. Frequent capital raises to buy bitcoin increase share count and debt burden. If bitcoin stagnates, these actions could erode per‑share value .
- Regulatory pressure. Crypto‑specific regulations or tax changes could limit the firm’s strategy or deter investors.
- Software business competitiveness. Strategy faces competition from larger analytics providers. Its software revenue is a small portion of total value and may not offset bitcoin risk.
- Market perception. Some analysts worry that MSTR’s stock trades at a premium to the value of its bitcoin holdings, especially when it underperforms bitcoin itself . This could compress if investors prefer spot bitcoin ETFs.
5 Conclusion
Eric Kim’s $700 price target for MicroStrategy appears to originate from his analysis that, when bitcoin reaches around $150,000, the company’s leveraged holdings should drive its stock into the $500–$700 range . His valuation essentially treats MSTR as a bitcoin‑centric vehicle with a small premium for its software business. Professional analysts offer similar or slightly lower targets; BTIG’s $700 target is the most bullish among major firms , while consensus estimates cluster in the mid‑$500s . The stock’s performance remains tied to bitcoin’s trajectory and has been highly volatile, delivering enormous gains during crypto bull markets but deep drawdowns during bear markets .
Investors considering MSTR should weigh the opportunity for leveraged exposure to bitcoin and the potential growth of Strategy’s AI‑analytics platform against risks from crypto volatility, dilution, and regulatory uncertainty. Kim’s target highlights the upside scenario; however, prudent analysis should also account for downside risks and a wide range of possible outcomes.