'Favorable setup': TD Cowen sees 106% upside in Sharplink as Galaxy yield fund, broadening Ethereum demand shift risk-reward

TD Cowen has restated its "buy" rating and $16 price target on Ethereum treasury firm Sharplink following the company's first quarter results, which showed revenues of over $12 million, The Block reported.

The firm's update arrived after Sharplink reported earnings and simultaneously announced a new co-managed yield fund with Galaxy Digital.

The fund targets roughly $125 million in capital, with Sharplink (SBET) contributing approximately $100 million, with a focus on DeFi and liquidity opportunities that generate returns above basic staking yields.

Analysts led by Lance Vitanza called the current share price a "favorable setup" driven by a persistent discount to NAV and expanding Ethereum (ETH) demand. They argued that the Galaxy arrangement represents a disciplined expansion of Sharplink's yield strategy. In their view, it leverages Galaxy's institutional sourcing capabilities while preserving ETH exposure through liquid staking.

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 — a discount TD Cowen said is growing harder to justify as capital efficiency improves and Ethereum demand broadens.

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Four demand pillars

TD Cowen identified four pillars underpinning that demand: stablecoins as a scaled global payments layer, tokenization approaching an inflection point as real-world assets move on-chain, DeFi as core infrastructure for lending and liquidity, and agentic finance or AI-driven autonomous economic activity, which the note called a new and underappreciated demand vector with long-duration optionality.

The staking-driven operating model provides meaningful downside support.

TD Cowen's analysis shows staking yield generating approximately $59 million annually against $22.3 million in fixed charges — roughly 2.6 times coverage — with a model breakeven ETH price of $883, well below current market levels of approximately $2,300.

Sharplink management already positions its yield approach as targeting what it calls "singles and doubles", or incremental returns above staking without compromising core ETH exposure.

Per TD Cowen, the Galaxy partnership extends that discipline into higher-quality DeFi opportunities without exceeding the firm's risk framework.

Formerly known as SharpLink Gaming, the firm pivoted to an Ethereum treasury strategy in mid-2025 under the backing of ConsenSys and the chairmanship of Ethereum co-founder Joe Lubin.

Lubin earlier this month backed digital asset treasury companies broadly, calling them a "profound innovation."

TD Cowen started coverage on Sharplink in April, alongside initiations on several other digital asset treasury companies. The $16 target implies approximately 106% upside from Monday’s close.