Strategy's shares fell after the company reported third-quarter results, but two of its sell-side backers aren't budging. StoneX and TD Cowen both reiterated buy ratings on the stock this week, citing the company's $4.83 billion cash reserve and a more stable STRC preferred structure.
The calls land at an awkward moment for Strategy shareholders, who watched the equity give back ground following the earnings release. The analysts' argument is that the balance sheet and the preferred fix matter more than the quarter's headline numbers.
Why the cash reserve matters
Strategy's $4.83 billion cash pile is the anchor of the bull case at both firms. It gives the company room to keep operating through a weaker stretch in bitcoin prices without being forced to sell assets or raise capital on bad terms. For a company whose equity is effectively a leveraged bitcoin proxy, that cushion is the difference between weathering a drawdown and becoming a forced seller.
None of that is new. What's changed is that the reserve is now being cited as a reason to look past a soft quarter rather than as a footnote in the bull thesis.
The STRC preferred fix
The second pillar is Strategy's reworked STRC preferred structure, which the analysts describe as more stable than what came before. Preferred stock is the part of the capital stack that matters most when common equity gets volatile, and a steadier structure reduces the risk of a disorderly reset or a funding squeeze.
Investors who hold Strategy for bitcoin exposure don't typically spend much time on the preferred. The sell side does. A preferred that behaves predictably makes the whole capital structure easier to underwrite, which in turn supports the case for owning the common.
Renewed bitcoin buying
Put the two together and the analysts see a setup for renewed bitcoin purchases. A cash reserve that doesn't need to be tapped for operations, plus a preferred structure that isn't a source of stress, leaves Strategy free to add to its holdings again. That's the implicit bet behind both buy ratings: the pause in buying is temporary, and the balance sheet is what makes it temporary.
There's no disclosed timeline for the next purchase. The ratings are a statement about capacity, not a schedule.
What's still unresolved
The post-earnings decline in the stock is the fact the ratings have to argue against, and neither firm has said the market is wrong about the quarter itself. The buy calls rest on the balance sheet and the preferred, not on the results.
What comes next is the market's own test. Strategy's stock will have to hold the levels it fell to after earnings before the analysts' thesis gets any confirmation, and the company will have to show that the cash reserve and the STRC structure translate into actual buying. Until one of those happens, the gap between the sell side's view and the tape is the story.
