Bernstein Lowers Strategy Target to $350 Amid Rising Interest Rates

AllianceBernstein has revised its price target on Strategy (formerly MicroStrategy) to $350, while maintaining an outperform rating. The firm cited changes in its thinking about Bitcoin's market cycle, the impact of equity dilution on Strategy's valuation model, and a less favorable macroeconomic backdrop for companies that finance their Bitcoin purchases through share issuance.

The analysts pointed to the end of a 40-year period of declining interest rates and rising sovereign debt levels. They believe this shift means higher interest rates are here to stay, increasing the cost of Strategy's aggressive Bitcoin acquisition strategy, which relies on issuing new shares to fund additional purchases.

Bernstein still projects that Bitcoin will reach $150,000 by mid-2027 and then climb towards a market cycle peak of $300,000 by 2029. This suggests the firm remains optimistic about Strategy's long-term prospects, despite short-term dilution concerns.