Sharplink Lost $686 Million In Q1, But SBET Could Still Double Thanks To 'Favorable Setup'

Sharplink Gaming Inc. (NASDAQ:SBET) has posted a $686 million net loss in Q1, yet TD Cowen reiterated its buy rating with a $16 price target, implying 106% upside from Monday’s close at $7.76. Revenue Jumps From $742,000 To $12.1 Million Sharplink reported Q1 2026 revenue of $12.1 million on Monday, up from just $742,000 in the same period last year. The company pointed to staking income from its treasury strategy as the main driver. The net loss of nearly $686 million came mostly from unrealized losses tied to Ethereum (CRYPTO: ETH) price declines. Ethereum was trading around $3,000 at the beginning of 2026 before dropping roughly 40% to $1,800 and closing the quarter at nearly $2,000. Sharplink holds 872,984 ETH as of May 4, a stash worth nearly $2.4 billion at current prices. That makes it the world’s second-largest public ETH treasury company behind Bitmine Immersion Technologies (NYSE:BMNR). Galaxy Digital Partnership Targets $125 Million In DeFi Yield Sharplink announced plans to launch the Galaxy Sharplink Onchain Yield Fund with Galaxy Digital, a $125 million initiative to deploy capital into DeFi and liquidity opportunities. Moreover, Sharplink will contribute approximately $100 million, with a focus on generating returns above basic staking yields. CEO Joseph Chalom described the strategy as hitting “singles and doubles,” not looking for VC-like returns. “Inbound demand and deployment opportunities have been strong, but we are not rushing,” Chalom said. “Operational rigor is non-negotiable,” he added. TD Cowen Sees Four Demand Pillars For Ethereum TD Cowen analysts led by Lance Vitanza called the current share price a “favorable setup” driven by a discount to NAV and expanding Ethereum demand. Sharplink currently holds approximately 873,000 ETH worth roughly $2 billion at current prices, implying a NAV of about $9.68 per share. At Monday’s close of $7.76, the stock trades at approximately 0.8 times NAV. TD Cowen identified four pillars for Ethereum demand: stablecoins as a scaled global payments layer, tokenization as real-world assets move on-chain, DeFi as core infrastructure for lending and liquidity, and agentic finance or AI-driven autonomous economic activity. The staking-driven operating model provides downside support. TD Cowen’s analysis shows staking yield generating approximately $59 million annually against $22.3 million in fixed charges, with a model breakeven ETH price of $883, well below current market levels. Image: Shutterstock