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.

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