We recently published a list of 10 Hottest Large-Cap Stocks So Far in 2025. In this article, we are going to take a look at where MicroStrategy Incorporated (NASDAQ:MSTR) stands against other hottest large-cap stocks so far in 2025.
The stock market as a whole hasn’t had a great start to the year, but there have been some outliers. Focusing on these outliers might pay off in the long run and the statistics behind it — especially this month — are very important. The S&P 500’s calendar year performance has matched the direction of January returns approximately 77% of the time. This means when January shows positive returns, the market finishes higher in 84% of these years with an average annual return of 15.5% for the whole year.
Even if January is negative, the market ends higher some 63% of the time, but with a return of around 2.2%. I’m bringing this up because I believe this correlation can also extend to certain stocks. We’ve seen many mega-cap tech stocks perform well last year after a solid January. A lot of big-cap stocks between $50 billion to $100 billion also performed well.
Accordingly, the methodology for this article involves me screening the top 10 stocks traded in U.S. markets with a market capitalization between $50 billion to $100 billion and then sorted by year-to-date performance.
A software engineer wearing a headset, collaborating with a remote team on a project.
MicroStrategy Incorporated (NASDAQ:MSTR)
- YTD Performance: 14%
MicroStrategy Incorporated (NASDAQ:MSTR) basically uses leverage to buy Bitcoin (BTC-USD) and once it appreciates, uses the expanded balance sheet to use even more leverage, and so on. The theory is that BTC will forever rise exponentially and many people see MSTR as a way to amplify BTC’s gains due to how leveraged the company is.
Bitcoin is up 3.7% year-to-date, so it is only natural that MicroStrategy (NASDAQ:MSTR) is also up. However, I do not think that this is something you should buy if you are looking for a long-term investment. MSTR has turned into a highly leveraged BTC derivative, and BTC itself is still quite speculative and can easily crash by over 50% in a bear market.
I would say that it is on a time bomb as I do not think that Bitcoin can deliver gains “exponentially.” Realistically, even a $5 trillion market capitalization could be possible but is borderline wishful thinking. If there is a true crypto winter in the coming years, the result would be disastrous for MSTR as BTC is its primary asset and keeps the debt-to-equity ratio relatively acceptable.
That said, if you’re looking to speculate and gamble with a small amount of your portfolio, MicroStrategy (NASDAQ:MSTR) is not a vehicle for that.
Overall, MSTR ranks 4th on our list of hottest large-cap stocks so far in 2025. While we acknowledge the potential of MSTR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MSTR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
