Benchmark began coverage of MicroStrategy (NASDAQ:MSTR) with a Buy rating and a price target of $990 on the stock. Currently, the company’s shares are trading more than 8% higher intra-day. The valuation is grounded in a sum-of-the-parts analysis, factoring in the projected year-end 2025 value of MicroStrategy's bitcoin holdings alongside the anticipated value of its business intelligence software operations by the end of 2025.

MicroStrategy's business model is notably distinct, primarily focusing on the acquisition and retention of bitcoins, which are central to the company's overall valuation. Concurrently, its software business plays a crucial role, providing stability to the valuation and generating the cash flow necessary for further bitcoin acquisitions. Consequently, the share price of MicroStrategy shows a strong correlation with the price movements of bitcoin, evidenced by a correlation coefficient of 0.94.

However, it's important to note that the company's strategic use of leverage to increase its bitcoin holdings may amplify its returns compared to the direct gains from the cryptocurrency itself.