Dec 11 (Reuters) - A meteoric rise in MicroStrategy's ( MSTR )

shares has made the bitcoin hoarder a likely candidate

for the tech-heavy Nasdaq 100 index ahead of an annual reshuffle

this week.

The loss-making software company, an aggressive investor in

the highly volatile cryptocurrency, has seen its shares soar

nearly 500% this year, taking its market capitalization to $90

billion.

The world's largest cryptocurrency hit the $100,000

milestone for the first time last week and has doubled in value

this year. It got a big boost after Donald Trump's U.S. election

victory as investors expect the president-elect to make good on

his promise of a crypto-friendly administration.

A Nasdaq 100 inclusion could spur more gains for

MicroStrategy ( MSTR ), whose bitcoin holding was valued at about $42

billion, as more investment firms include the stock in their

portfolios to accurately reflect the index composition.

For an entry into the index, a stock listed on the Nasdaq

exchange must rank among the top 100 by market value, have a

minimum daily trading volume of 200,000 shares and not be in the

financial sector. The reshuffle announcement is due on Friday

after market close.

"MicroStrategy ( MSTR ) seems to check all the boxes to make it into

the Nasdaq 100 when it is reconstituted in December," said Art

Hogan, chief market strategist at B. Riley Wealth Management.

The potential addition would give the Nasdaq 100 index

indirect exposure to bitcoin and could make related ETFs more

appealing to a younger investor base, said Todd Rosenbluth, head

of ETF research at VettaFi.

Data analytics firm Palantir ( PLTR ), which has risen

four-fold in market value to $160 billion this year, is another

likely candidate for index inclusion.

AI server maker Super Micro Computer ( SMCI ) could be among

the ones to be ejected from the index as it has delayed filing

its annual and quarterly reports. Super Micro CEO Charles Liang

said on Tuesday he was confident the company would not be

delisted.

Nasdaq did not respond to a Reuters request for comment.

RIDING ON BITCOIN BOOM

MicroStrategy ( MSTR ) adopted bitcoin as its main treasury reserve

asset in 2020 under the leadership of co-founder Michael Saylor

as revenue from its software business slowed.

The company has amassed 400,000 bitcoins, making it the

biggest corporate holder of the digital asset. It financed its

purchases through a combination of equity and debt deals and

controls over 2% of bitcoin's total supply which is capped at 21

million.

The company reported a net loss of $340 million in the three

ended Sept. 20, its third consecutive quarterly loss.

Not everyone is convinced about MicroStrategy's ( MSTR ) potential

entry into the tech index.

Michael O'Rourke, chief market strategist at JonesTrading,

said that the sharp rise in the company's market value "is not

the result of its business as a software company (but) its

sizeable investments in bitcoin financed by significant equity

and debt capital markets activity."

"MicroStrategy ( MSTR ) should be reclassified as a 'financial'

(stock) which would render it ineligible for the Nasdaq 100."

MicroStrategy ( MSTR ) is viewed by market participants as equivalent

to a leveraged bitcoin fund, J.P.Morgan said in a note last

week.

Wall Street believes there is room for the stock to grow.

All nine brokerages currently covering MicroStrategy ( MSTR ) rate it

"buy" or higher with a median price target of $510, which

implies a 35% upside from the stock's last close.

(Reporting by Medha Singh in Bengaluru; Editing by Anil

D'Silva)