Summary SharpLink's unique AI-powered C4 platform and bold Ethereum treasury strategy create a compelling dual growth narrative for the stock. The $463 million Ethereum investment, with staking expected to yield $16 million annually, could transform SharpLink's financials and drive revenue growth. Despite recent volatility and misunderstood dilution fears, the current $13 share price offers a strong entry point ahead of August earnings. I'm initiating a buy rating, expecting ETH staking revenue and expanded C4 licensing to catalyze a significant stock re-rating. Investment thesis SharpLink Gaming ( SBET ) is a unique company that’s come on my radar because of the angle it tackles AI use cases; what they are is essentially an “online technology company that connects sports fans, sports media, and sports betting operators through its platform.” The plot twist is that they have also been building up a stake in Ethereum, having recently invested $463 million and, in doing so, adopting Ethereum as a treasury asset. The Ethereum investment was a bold move that skyrocketed the stock back in May from roughly $3 to $78 per share. Since then, the stock price has reversed, coming down to under $10 before this Monday. The question is if we’ll see momentum build up again for SharpLink, similar to what we saw in May. I think we might. What I’m expecting from the next earnings is for the effects of this investment to finally show up in revenue. That is, I see Sharplink’s Ethereum stake and annual gain yield of $16 million benefiting the company's financials. That gain yield is 5 times their yearly revenue. Additionally, I see a positive trend for the gaming side of their business. Their C4 platform, which I'll explain more below, is ready to go, and I expect more licensing deals for the algorithm to come soon. These two factors make me bullish on a stock that has come down dramatically, 84%, since late May, as I’ll explain. YCharts Origins of SharpLink For those who don’t know, SharpLink is an online performance marketing company. It aims to connect sports fans directly with sports betting and gaming operators through some useful widgets and embeds. Their AI-powered platform is known as their “C4 system,” which functions like a personalization engine designed to enhance user engagement and increase betting conversion for sportsbooks. That being said, Sharplink isn't a betting company itself; it simply boosts engagement for sportsbooks by suggesting personalized bets. So we have to remember revenue for Sharplinks comes through licensing deals, a sportsbook pays them to send bettors to their sites, and spend money. Regarding the C4 platform, as all good AI models do, it gathers a vast amount of data from SharpLink’s users, including a bettor’s account history, interaction behavior, and betting preferences. Alongside this, they feed live betting market data. With this information, the predictive algorithms then create contextual bet recommendations, live odds widgets, or even suggested bets embedded within certain content. For example, I'm a Cowboys fan myself. Now, imagine I’ve been reading a lot of news about the roster and have viewed the season schedule. Say it’s Week 5 of the NFL season, and the Cowboys are facing the Eagles, and I'm reading an article before the game. SharpLink’s system would surface contextual betting suggestions without disrupting the flow of my article. I could be reading about Dak Prescott’s performance, and a widget might appear offering a bet on him throwing over 1.5 touchdowns at -125. If the Cowboys are playing that week, I might see a mainline bet like “Cowboys to beat Eagles at +145,” along with trending player props such as “CeeDee Lamb Over 79.5 receiving yards.” The overall API is completely seamless and has been integrated into several sportsbook platforms, allowing you to click on a suggestion and be taken directly to your preferred sportsbook to place the bet. But that's not all, say a fan is watching the game live, the C4 could actually offer a real-time bet like “Cowboys to come back from behind at +190,” based on the flow of the game. All of this happens seamlessly and, more importantly, legally. Bullish on C4 SharpLink’s C4 strategy has so far only been proven in limited pilots. They've landed deals with a few sportsbooks, such as SaharaBets , but haven’t really scaled fully. However, early results showed promise; we could see about a 20% increase in user engagement and bet conversions. This makes sense; bettors, like us investors, do a substantial amount of research. Now, with C4 operational, they’ll have the opportunity to place that bet as they research. Additionally, integration with other platforms is straightforward, achieved simply via an API plugin. What this stock really needs is for SharpLink to get more licensing deals with other mid-tier sportsbooks. Remember, C4 is essentially a finished product, so any integration could be monetized quickly. A financial rundown Taking a look back at their latest financial report, investors might not see the best display. They posted full-year 2024 highlights in March, which showed revenue for SharpLink at $3.66 million. This represents a 26% decline from the $4.95 million reported in 2023. Gross Profit came in at roughly $906,000 with a 24.8% gross margin. Cash and Short-Term Investments were listed at $1.44 million, down 42% year over year. The company also stated it had no debt. However, their revenue has been on the decline for quite some time now. As shown in the chart below, their revenue has decreased significantly since mid-2023. We can expect the next earnings report to be released sometime in mid-August. Since the company has been struggling financially for the past year, management looked to branch out into something new: crypto. TheTechie A big spike in the stock explained Up until recently, SharpLink was focused on sports betting marketing. Their main catalyst was their C4 platform, as I explained, and their revenue came from licensing and delivering targeted betting content for operators like SaharaBets. However, as the company's finances declined slowly, it underwent a transformation to become what many dubbed a "public Ethereum treasury vehicle." After the move, the stock underwent significant changes, to say the least. If you examine the 6-month stock, you'll see a massive spike in May of this year. The stock was only trading at a $3 average up until May 22nd, then over the following week, the stock hit a high of $80 before crashing back down. Initially, news broke of a massive $425 million private equity deal at $6.15 per share, led by Consensys and Ethereum co-founder Joseph Lubin. Funds from the placement were tipped to fund a big stake in Ethereum for its crypto treasury. Lubin then joined the board as chairman and reinforced a strong crypto narrative. After that, the markets responded with a huge surge. Sharplink rocketed in a matter of days, briefly hitting $80 on May 29th, as a flood of FOMO retail investors tried to buy in. So, what caused the stock to crash so hard afterwards? Following the initial private investment, SharpLink filed a Form S-3 shelf registration to allow the resale of approximately 58.7 million shares. As you can imagine, this led to intense panic selling. The stock plunged 70% overnight. Now, I believe there was a serious misunderstanding with the filed SEC Document that scared investors, with many misreading the shelf registration as imminent dilution. Later that month, Joseph Lubin and Consensys counsel clarified it was a standard post-PIPE procedure, not an immediate share sale. Deployment of Ethereum Treasury Strategy Here's what we know: SharpLink disclosed that it had purchased roughly 176,271 ETH in June 2025 for about $ 463 million. Since then, this holding has likely grown to over 190,000 ETH. Management mentioned that they’ll stake or deploy 95% of these holdings to earn yield, essentially passive crypto income. When they stake Ethereum, it involves locking up the asset to help validate transactions on the Ethereum network. In return, Sharplink earns a percentage-based yield, like interest or dividends. For Sharplink, a company with such small revenue numbers, staking Ethereum could significantly impact its finances. Let’s assume they’ve staked 180,000 ETH, or about 95% of the 190,000 ETH they reportedly hold. Their 180,000 ETH is worth approximately $2,600 each today. As a bare minimum, they’ll earn a 3.5% yield on their value, amounting to approximately $486 million in total. That's a $16.38 million yield each year, 5 times more than they earned as a gaming business. I expect to see revenue from staking show up in 1Q25 earnings in August. Valuation The stock currently has a market capitalization of approximately $818 million and an earnings per share of $2.88. This isn’t an $80 stock anymore; the market really has no idea where to place it. Shares can be picked up for around $13 today. I believe that's a good buy-in point for investors ahead of the next earnings. Seeking Alpha provides a TTM price-to-sales ratio of 1.31 for them, compared to a sector median of 0.98. TTM EV to sales ratio is 238.35 against a median of 1.33. This outrageous figure is due to SharpLink having extremely low revenue. I wouldn’t give this valuation too much thought, as stakes in Ethereum should provide the revenue inflection point we’re all looking for. What's next? All eyes should be on 1Q25 earnings in mid-August. I expect the report to come out between the 13th and the 14th. What we, as investors, need to see is revenue from ETH staking, as well as an updated ETH holdings figure with a cost basis. On top of all this, expect management to come forward with a full strategy for their new crypto-staking business. Any of these will be good signs for SharpLink’s stock, in my opinion. Therefore, I'm initiating the stock with a buy at current levels.