Smart Options for Micro Strategy Stocks

The stock market is a popularity contest in the short run but a weighing machine in the long run. At least, that’s what Warren Buffett and Benjamin Graham, the fathers of value investing, think today. Investors today can see this trend in a way that attention has flown from it Technology field For the world of cryptocurrencies.

Especially in the way that stocks with heavy bitcoin or other cryptocurrency holdings on their balance sheets have seen the most price action in 2024, e.g. MicroStrategy Inc. NASDAQ: MSTR. The stock was the darling of the industry when it was hot, but now that Bitcoin is pulling from its highs, it is being questioned. 55% of its 52-week high.

While investors may start to panic if they don’t buy that big dip, other discount stocks may be better buys today. An example can be given Tesla Inc. NASDAQ: TSLAin the form of Automotive stock has come down to par 77% of its 52-week highor Advanced Micro Devices Inc. NASDAQ: AMD to give one of the best discounts to investors in the semiconductor industry 53% of its 52-week high today

The risk behind microstrategy stocks

Even though the stock has traded below what would be an attractive level to buy, there is some inherent risk in the business model. Just as it was responsible for the stock’s success, it may also be responsible for its downfall. The reason is that a core business based on software, does not make any money.

Therefore, MicroStrategy buys Bitcoin for its balance sheet through ownership dilution. In other words, the company issues shares to the market to fund its leveraged bitcoin buying game. While this is great for investors as Bitcoin goes up, the profitability and volatility of this machine is also devastating when the coin goes down.

So, even though 55% of its 52-week high is attractive, MicroStrategy’s risk-to-reward ratio isn’t worth investors’ capital—nor their time. On that note, these two stocks offer a completely different setup in the first quarter of 2025.

Tesla stock’s tailwinds outweigh microstrategy discounts

After A The tragic explosion The stock fell 6.7% as investors reacted to the alarming incident, involving a Tesla Cybertruck outside a Las Vegas hotel. Adding to the pressure, Tesla reported its first annual sales decline in more than a decade, signaling that the stock is currently facing significant challenges.

However, others focused on value will see this Tesla sold more than 2 million vehicles in 2024Second only to China BYD OTCMKTS: BYDDF. The fact that oil prices are so low right now, dragging down gas prices, is a cyclical tailwind in sales of electric vehicles in general.

With this including trends in consumer credit, investors have the perfect storm to expect lower Tesla sales. But it ends there. Wall Street analysts, particularly at Mizuho, ​​still give the stock an outperform rating through December 2024, with valuations this time around. Up to $515 per share.

To prove these analysts right, Tesla would have to rally up to 36% from its current position. The risks for Tesla stock are priced in at these discounts, giving investors a better risk-to-reward setup as they move forward with a potential purchase.

Advanced Micro Devices: New NVIDIA

As for other stocks taking the podium, there could be Advanced Micro Devices NVIDIA Co. NASDAQ: NVDA As the new leader of the artificial intelligence race through semiconductor manufacturing. The stock not only offers a price discount, but also a massive upside from Wall Street analysts.

Today, Advanced Micro Devices stock has a A consensus price target of $191.96That would call for a net increase of 60% from today’s prices. This setup would give investors a much better view than NVIDIA agreed to $164.1 price target A share, which only demands 20% up.

In part, NVIDIA’s relative price action, which tripled, recently attracted some institutional investors to the Advanced Micro Devices stock. Over the past 12 months, up to $19 billion flowed into the company from institutions, but a recent buyout could be more meaningful to investors.

State Street has decided to increase its holdings of Advanced Micro Devices by 2.3% through November 2024, taking its net position to an all-time high. $11.5 billion todayor 4.3% ownership in the company.

Before you consider Tesla, you might want to hear this.

MarketBeat keeps track of Wall Street’s top-rated and best-performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified Five stocks That top analysts are quietly telling their clients to buy before the broader market arrives… and Tesla wasn’t on the list.

While Tesla currently has a “Hold” rating among analysts, top analysts believe these five stocks are better buys.

Check out five stocks here

Like this article? Share it with a friend.

Link copied to clipboard.