A top crypto analyst said that MicroStrategy stock could go up even more in the next few weeks, based on whether the Nasdaq 100 stock index sees it as a software developer or a financials company.
The Virginia-based company could get a big boost if it is added to the Nasdaq 100 index on Friday, when the stock market index is changed. FundStrat’s head of digital asset strategy, Sean Farrell, said this in a talk.
MicroStrategy MSTR -5.13% stock price has already gone up by 500% in 2024. This is because Bitcoin’s value has gone up a lot this year, which has caused the software developer’s stash of more than 400,000 Bitcoins to go up in value very quickly.
The crypto investment firm’s stock price could go up even more with new money from exchange traded funds (ETFs) if it is added to the Nasdaq 100 index. If that happens, it could take the place of Moderna MRNA -0.06% on Friday, according to Farrell.
The Nasdaq 100 index COMP -0.45% has been around since 1985 and is meant to cover the top 100 companies in the United States’ most creative and fastest-growing industries. The Nasdaq Financial 100, which includes financial companies, is used instead of this measure.
If MicroStrategy is included in the Nasdaq 100 stock market index, it will depend on whether it is a software creator or a financial sector business.
A company must be in the top 100 by market capitalization, trade more than 200,000 shares every day, and be in an industry other than finance in order to be on the Nasdaq 100.
Farrell said that if MicroStrategy was added to the Nasdaq 100, the stock would get a boost from the $550 billion in assets managed by ETFs that track the stock market index. This could cause the stock to go through a “electric” time.
The player said, “I’m definitely adding here, and I think it’s probably a very good risk reward to add here.” “It is clear that there is a risk here: that it doesn’t make the index.”
If Microstrategy is added to the Nasdaq 100 index, ETFs won’t be able to make changes to the new index until December 23. This means that shares in the software developer-turned-crypto investor could go up for more than a week, according to Farrell.
The company MicroStrategy began in 1989 as a data analytics company. Since August 2020, it has bought billions of Bitcoin and is now looking to raise another $43 billion to spend on the cryptocurrency over the next three years.
On Wednesday, Microstrategy’s stock price went up 9%. Farrell said this was because of “excitement” about the company’s possible inclusion on the Nasdaq 100 index.
The big data analytics company Palantir Technologies PLTR +0.23%, which was founded by Peter Thiel, is also in the running to join the Nasdaq 100. On the other hand, Super Micro Computer SMCI -0.59%, which makes servers, could lose its spot.
