Hargreaves Lansdown’s clients are buying loads of this US growth stock. Should I?

Our writer’s noticed that during the week after Christmas, many investors bought this US growth stock. He asks whether he should do the same.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

The flag of the United States of America flying in front of the Capitol building

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

MicroStrategy (NASDAQ:MSTR) is a growth stock with an unusual history. It started life as a software company but in late 2020, it began buying cryptocurrency as a means of shoring up its balance sheet. It now claims to be the “largest corporate holder of Bitcoin in the world”.

And it appears to have caught the attention of many investors on both sides of the Atlantic.

Of the 11 US analysts covering the company, 10 consider it a Buy.

Should you invest £1,000 in easyJet right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if easyJet made the list?

See the 6 stocks

Closer to home, during the week ended 3 January, it was the most popular stock with Hargreaves Lansdown’s clients. Of all that week’s purchases on the platform, MicroStrategy saw the most activity, both in terms of trades (3.21%) and the value of deals placed (5.04%).

An extended bull run

Not surprisingly, this interest has helped drive its price higher.

Since January 2024, it’s increased by 470%.

And this impressive performance shows no signs of slowing down. Helped by the prospect of a second Trump presidency (he’s seen as being more pro-crypto than Joe Biden) during the first eight days of 2025, the stock’s up 18%. Past performance is not an indicator of future performance though, of course.

Created with Highcharts 11.4.3Strategy PriceZoom1M3M6MYTD1Y5Y10YALL9 Jan 20203 Apr 2025Zoom ▾Jul '20Jan '21Jul '21Jan '22Jul '22Jan '23Jul '23Jan '24Jul '24Jan '252021202120222022202320232024202420252025www.fool.co.uk

But a closer look at the statistics is revealing.

Although it was the post-Christmas number one with Hargreaves Lansdown’s buyers, it was also popular with sellers, accounting for 4.55% of all trades.

This could be a sign that the stock’s being bought with a view to making a quick profit, rather than for its long-term growth prospects.

It might also explain why it’s the most volatile stock on the S&P 500. Although its done well in 2025, I think it’s worth noting that it’s fallen 28% from its November 2024 peak.

Looking to the future

But the company does have a growth strategy, albeit a simple one. It plans to buy more Bitcoin, and lots of it.

Over the next three years, it hopes to purchase $42bn of the digital asset.

However, given that MicroStrategy’s software business isn’t cash generative — during the nine months ended 30 September 2024, it reported a post-tax loss of $48m — all of the funds will have to come from a combination of debt ($21bn) and equity ($21bn).

And as long as Bitcoin doesn’t crash, I’m sure everything will be okay. Otherwise, I fear it’ll be catastrophic for the company and its shareholders.

The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of investment advice. Bitcoin and other cryptocurrencies are highly speculative and volatile assets, which carry several risks, including the total loss of any monies invested. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.

Leverage

Latest reports suggest that the company currently owns 447,470 Bitcoin, worth approximately $43bn. Its market cap is $84bn — 95% higher.

In other words, investors are happy to pay more for the Bitcoin held by MicroStrategy than if they bought it directly themselves.

To my surprise, this means its share price has outperformed the value of the cryptocurrency over the past 12 months by a factor of four.  

This doesn’t appear sustainable to me.

And it suggests that if the value of Bitcoin falls, the stock market valuation of MicroStrategy will crash by a lot more.

Personally, I don’t want to add this level of risk (or volatility) to my share portfolio. I’m therefore going to steer clear of MicroStrategy, despite the hype surrounding the stock.

Like buying £1 for 31p

This seems ridiculous, but we almost never see shares looking this cheap. Yet this Share Advisor pick has a price/book ratio of 0.31. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 31p they invest!

Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.

What’s more, it currently boasts a stellar dividend yield of around 10%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?

See the full investment case

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

James Beard has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

The Rolls-Royce share price has fallen! Is this the moment investors have been waiting for?

Even the Rolls-Royce share price can't escape current stock market volatility, falling slightly over the last week. Should investors consider…

Read more »

Modern suburban family houses with car on driveway
Investing Articles

Down 59% from its 12-month highs, is this FTSE 250 stock too cheap to ignore?

Shares in FTSE 250 housebuilder Vistry are almost certainly too cheap to ignore. But are they discounted enough to offset…

Read more »

Young Asian woman with head in hands at her desk
Investing Articles

As the S&P 500 struggles to recover, here’s what Warren Buffett’s doing

The S&P 500 is fighting to regain its February highs amid ongoing trade tariff uncertainty. Our writer looks to the…

Read more »

Investing Articles

When will Lloyds shares hit £1?

Lloyds shares have surged over the past 12 months, but where will they go next? Dr James Fox thinks there’s…

Read more »

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

Stock-market crash: the meltdown of the Magnificent 7

Just before Christmas, these Magnificent Seven stocks were riding high. But after the worst quarter for US stocks since autumn…

Read more »

Investing Articles

Wow! IAG shares are undervalued by 47%, according to analysts

IAG shares have surged over the past 18 months, but analysts are pointing to more growth. Dr James Fox takes…

Read more »

Investing Articles

2 cheap FTSE 100 and FTSE 250 shares to consider for an ISA before 5 April!

These FTSE 100 and FTSE 250 shares are on sale today! Here's why long-term Stocks and Shares ISA investors should…

Read more »

Investing Articles

How I’m building a new second income for 2035

Millions of us invest for a second income. Here are the steps Dr James Fox is taking in order to…

Read more »