Arqit Quantum (Nasdaq: ARQQ), a UK quantum-safe encryption company, said on October 8, 2026 that it expects only about $1 million of revenue for its fiscal year 2026, and the stock fell 18% that day. Short seller DeepSail Capital (@DeepSailCapital) says the company is still valued at around $300 million, or "like 450x revenue." Bulls point to a new NATO consortium contract and about $51 million of cash.
This is journalism and commentary, not investment advice. We hold no position unless stated.
Key facts
- Ticker and exchange: Arqit Quantum Inc., ARQQ, Nasdaq.
- Situation type: Valuation short on a small, cash-rich, early-revenue technology company.
- The call: DeepSail Capital re-shorted ARQQ on September 28, 2026 and reiterated the short on October 8, 2026.
- Revenue: Arqit guided fiscal 2026 revenue (year ended September 30) to $975,000 to $1.0 million, up from $530,000 in fiscal 2025.
- Second half: Revenue for the six months to September 30, 2026 is expected at $355,000 to $380,000, down from $463,000 a year earlier.
- Cash: About $51 million.
- Price: ARQQ closed at $22.55 on October 7, 2026 and $18.43 on October 8, 2026, down about 18%.
Is Arqit Quantum a good bet right now?
It depends on whether revenue can catch up with the valuation.
At about $1 million of annual revenue, almost all of Arqit's market value rests on future contracts. The cash pile limits near-term funding risk, but it does not by itself justify the price.
Why are short sellers bearish on Arqit Quantum?
- Tiny revenue. Fiscal 2026 revenue of about $1 million is small for a company of its market value.
- Revenue went backward in the second half. Arqit said results were hurt by a Middle East contract, per its preliminary results.
- Quantum hype. Shorts argue the stock trades with the quantum-computing theme rather than on its own sales.
Who's making this call and why?
DeepSail Capital (@DeepSailCapital) is an investor with about 57,300 followers on X who posts both long and short ideas.
On September 28, 2026, the account said it had closed and reopened the short once already. "Back to a good spot to re short it," it wrote, adding that the cost to borrow shares had come down.
After the preliminary results, it posted on October 8, 2026: "Still worth $300m or like 450x revenue."
The 450x figure is DeepSail's own shorthand. On full-year revenue of about $1 million, a $300 million value works out to roughly 300 times sales; on the weaker second-half pace, the multiple is higher.
Since the September 28 call, ARQQ has fallen from $24.60, the last close before that post, to $18.43 on October 8, 2026, about 25%.
Track record. In our tracking of DeepSail Capital's public calls, it is 13-12 (a .520 win rate) on 25 calls scored at 180 days against the S&P 500, with an average edge of +8.9 percentage points. Its last 10 scored calls went 2-8.
Supporter: @stockgutter, a short-focused account, said it is short through options and wrote: "Guided today to a whopping $1m revenue for 2026."
Who disagrees?
The bull angle centers on the NATO deal.
Arqit said it signed a contract on October 6, 2026 to provide secure networking services to NATO as part of a winning consortium. @BonjilNote summarized it as one year plus two renewal options, with the amount undisclosed, and wrote: "A sub-$1M revenue company now counts NATO as a customer."
The same post cautioned that Arqit's share of the consortium deal is unknown.
What's the bear case, and what's the bull case?
Bear case:
- Revenue is around $1 million a year while the market value is in the hundreds of millions.
- Second-half revenue fell year over year.
- Contract sizes, including NATO's, are not disclosed.
Bull case:
- About $51 million of cash gives Arqit time to win more contracts.
- A NATO customer could help win other defense and government work.
- Fiscal 2026 revenue still nearly doubled from fiscal 2025.
What are the key verifiable facts?
- Arqit announced preliminary fiscal 2026 results on October 8, 2026, via GlobeNewswire.
- Fiscal 2026 revenue is expected at $975,000 to $1.0 million versus $530,000 in fiscal 2025, per a summary of the release.
- Second-half revenue is expected at $355,000 to $380,000 versus $463,000.
- Full audited results are due in December 2026.
What would prove it right or wrong?
Signals the short is working:
- Full results in December 2026 confirm flat or falling revenue.
- Arqit raises equity at a discount.
- The NATO contract turns out to be small.
Signals it is failing:
- Arqit discloses a large contract value or new government customers.
- Quarterly revenue starts to grow quickly.
- The quantum-computing theme lifts the sector, squeezing short sellers.
This is journalism and commentary, not investment advice. We hold no position unless stated.