Should You Buy, Sell, or Hold MSTR Stock Before Q2 Earnings?

MicroStrategy MSTR, doing business as “Strategy,” is set to report its second-quarter 2025 results on July 31.

The Zacks Consensus Estimate for second-quarter revenues is currently pegged at $112.15 million, indicating growth of 0.64% year over year. 

The consensus mark for loss is currently pegged at 12 cents per share, unchanged over the past 30 days. The company reported a loss of 76 cents per share in the year-ago quarter.
 

MicroStrategy Incorporated Price and EPS Surprise

MicroStrategy Incorporated price-eps-surprise | MicroStrategy Incorporated Quote

Let’s see how things are shaping up prior to this announcement.

Factors to Note for MSTR’s Q2 Earnings

Strategy is the world’s largest bitcoin treasury company, holding 607,770 Bitcoins as of July 20, 2025. In July, Strategy acquired 6,220 Bitcoins for $739.8 million. In early June, Strategy acquired 10,100 bitcoins for $1.05 billion.

Strategy is expected to have benefited from the Trump administration’s announcement of the establishment of a strategic bitcoin reserve. Bitcoin, the most popular cryptocurrency, has been soaring due to increasing acceptance as a non-sovereign asset, as well as higher institutional and corporate adoption.

MSTR is expected to have benefited from increasing bitcoin yield, which was 13.7% year to date (as of April 28, 2025). This is expected to keep the company on track to reach the full-year target of 25% and the bitcoin dollar gain target of $15 billion. Bitcoin gains in dollar terms were $4.1 billion in the first quarter of 2025 and $5.8 billion as of April 28, 2025.

Strategy is expected to have benefited from growing software subscription revenues that surged 62% year over year to $37.1 million and accounted for 33% of first-quarter 2025 total revenues. Subscription billings grew 38% year over year to $24.5 million. The trend is expected to have continued in the to-be-reported quarter.

MSTR Shares Outperform Sector, Industry

Strategy shares have returned 39.4% year to date (YTD), outperforming the Zacks Computer & Technology sector’s return of 11.3% and the Zacks Computer Software industry’s 19.4%. MSTR shares have outperformed MARA Digital MARA and Tesla TSLA YTD, but lag Riot Platform RIOT. While MARA Digital and Riot Platform shares returned 2.3% and 42.1%, respectively, Tesla dropped 19.4%.

MSTR Stock’s Performance

Strategy stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.

In terms of Price/Book, MSTR is trading at 3.43X, higher than MARA Digital’s 1.62X and Riot Platform’s 1.76X.

Price/Book: MSTR Vs. MARA

Price/Book: MSTR Vs. RIOT

MSTR’s Benefits Growing From Growing Bitcoin Holding

The passing of the GENIUS Act on July 17 provides a legal background to stablecoins. Other pending regulations — The CLARITY Act and The Anti-CBDC Surveillance State Act — bode well for cryptocurrency enthusiasts. The improving favorable regulatory environment bodes well for Strategy, although Bitcoin’s volatility is a headache.

Strategy estimates to generate net proceeds of $2.474 billion from the initial public offering of 28,011,111 shares of Variable Rate Series A Perpetual Stretch Preferred Stock (the “STRC Stock”), at a public offering price of $90 per share. Strategy has issued $20.9 billion in equities and $6.4 billion in fixed income securities as part of its 21/21 plan since Oct. 30, 2024. The company has $14.6 million remaining under fixed income securities and $0.1 million under equities as part of the existing plan. 

Strategy currently plans to raise $42 billion through equity issuance and $42 billion through fixed income securities by the end of 2027. Under the current plan, the company has $21.1 billion in equity and $35.6 billion in fixed income securities remaining to be issued.

Strategy is expanding AI capabilities with the general availability of Mosaic, an AI-powered Universal Intelligence Layer. This launch aligns with the company’s shift toward cloud-first, subscription-based services. The company benefits from continuing cloud demand with its flagship Strategy One that powers some of the largest analytics deployments in the world. Strategy One supports varied industries, including retail, banking, technology, manufacturing, insurance, consulting, healthcare, telecommunications and the public sector.

Conclusion

Bitcoin’s inherent volatility, along with Strategy’s stretched valuation, makes the MSTR stock a risky bet ahead of the second quarter of 2025.

Strategy currently has a Zacks Rank #3 (Hold), which implies that investors should wait for a better entry point to accumulate the stock.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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