TD Cowen cut its 12-month price target for Strategy (formerly MicroStrategy) to $440 from $500 on Jan. 14, 2026, citing a weaker Bitcoin-yield outlook and dilution from recent capital raises. The revision reframes the near-term upside case as more dependent on per-share economics than on headline BTC accumulation.
The firm kept a Buy rating, but it emphasized that accelerated BTC buying funded by new equity issuance creates near-term modeling headwinds. In practical terms, Strategy’s accumulation pace is being matched by a higher share count, which can pressure Bitcoin-per-share metrics even when total holdings rise.
What drove the target cut
The core change was a lower fiscal-year 2026 Bitcoin yield forecast of 7.1%, down from 8.8% and well below the 22.8% reference for fiscal-year 2025. TD Cowen explicitly tied the Jan. 14 target revision to that reduced yield expectation.
TD Cowen also pointed to capital-markets activity that mechanically dilutes BTC exposure per share, including $1.25 billion raised through 6.8 million common shares and 1.2 million preferred shares. The note framed that funding mix as a key input into valuation, particularly as it supports additional purchases cited at roughly 155,000 BTC.
What the Buy rating is underwriting
Even with the lower target, TD Cowen continued to frame Strategy as a leveraged vehicle for Bitcoin exposure and kept its recommendation intact. The firm’s assumptions include Bitcoin reaching roughly $177,000 by the end of 2026 and about $226,000 by the end of 2027, alongside an expected rebound in Strategy’s Bitcoin return rate to 8.1% in fiscal-year 2027.
From a capital-structure standpoint, the trade-off is straightforward: aggressive accumulation can increase BTC exposure while ongoing issuance can dilute the per-share payoff profile and introduce execution risk around each funding-and-buy tranche. That structure also tightens sensitivity to BTC volatility and makes timing, pricing, and financing terms more operationally material to the thesis.
Near term, investors are likely to focus on issuance cadence, use of proceeds, and the trajectory of BTC-per-share outcomes as the next reporting cycle tests whether the strategy restores yield and per-share economics. In enterprise risk terms, the key question is whether accumulation momentum and funding discipline stay aligned with the yield assumptions that underpin the revised valuation.