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Context

In our November deep dive and the February 26 update, we discussed the strategic positioning of Creotech Instruments (WSE: CRI) at the intersection of European space infrastructure and quantum technologies, as well as the mechanics of the planned spin-off of the quantum segment into Creotech Quantum.

We also reviewed the operational milestones that helped drive the recent market repricing — including ESA confirmations, satellite commissioning milestones, government contracts, and the strategic partnership with Eutelsat in the context of the IRIS² secure connectivity program.

Since that publication, several additional developments have clarified the next phase of the story, particularly regarding the formal spin-off structure and evolving institutional dynamics around the stock.

Shareholders approve the spin-off

On 4 March 2026, the Extraordinary General Meeting of Creotech Instruments approved the demerger of the company into two entities.

The transaction will be executed by transferring an organized part of the enterprise — the quantum technology segment — into a newly created entity called Creotech Quantum.

Following the separation:

• Creotech Instruments will remain focused on space technologies and satellite infrastructure

• Creotech Quantum will focus on quantum technologies and secure communication systems

According to current plans, Creotech Quantum is expected to debut on the Warsaw Stock Exchange on 17 April.

The spin-off effectively separates two technology domains that had previously been bundled within a single corporate structure.

Pricing mechanics of the spin-off

Another point that recently required clarification concerns the reference pricing of Creotech Quantum shares.

In the original demerger documentation, a reference value of PLN 72.99 appeared in the division plan. Importantly, this figure was not intended as a fixed IPO price, but rather as a technical valuation derived from the market price of Creotech shares at the time the division plan was prepared.

Subsequent clarification from the company confirms that the actual mechanism will be proportional rather than fixed.

In simplified terms:

• the Creotech Instruments share price will be technically adjusted downward by approximately 16.5%

• the reference value of Creotech Quantum shares will correspond to roughly 16.5% of the Creotech closing price before the adjustment

Importantly, the reference price is only a technical starting point — the actual opening price of Creotech Quantum will depend on supply and demand once trading begins.

Entry into the mWIG40 index

Another notable development concerns Creotech’s inclusion in the mWIG40 index.

According to information published by PAP Biznes regarding the upcoming index revision on the Warsaw Stock Exchange, Creotech Instruments will enter the mWIG40 index as part of the periodic reshuffle of GPW indices.

The mWIG40 represents the mid-capitalization segment of the Warsaw Stock Exchange, grouping the 40 largest listed companies outside the blue-chip WIG20 index. Constituents are selected primarily based on free-float market capitalization, number of shares available for trading and liquidity.

For Creotech, this marks another step in a progression that began with its listing on NewConnect, followed by the transition to the main GPW market, inclusion in sWIG80, and now advancement into mWIG40.

Index inclusion also matters from a market-structure perspective. Institutional investors — including OFE pension funds, PPK retirement funds and index-tracking strategies — often allocate capital according to index composition. As a result, companies entering higher index tiers frequently experience gradual increases in institutional ownership and trading liquidity over time.

The speed of repricing

The pace of the recent market repricing has also been remarkable.

When we published our deep dive on 19 November 2025, Creotech was trading around PLN 359.

Our most recent update on 26 February 2026 discussed the stock near PLN 576, already representing more than 60% growth.

As of early March, the share price has approached nearly PLN 700, implying roughly a doubling of the price in about 100 days.

Even for a constructive thesis, this speed is unusual.

CyberMoat has seen several successful investment ideas in the past — including one ten-bagger — but the tempo of the Creotech move has been particularly striking.

Whether this reflects the early stage of a longer structural repricing or simply a strong narrative-driven phase remains to be seen.

A symbolic milestone along the way?

Creotech crossed an important symbolic threshold earlier in its development.

In September 2025, the company’s market capitalization exceeded PLN 1 billion, placing it among the relatively small group of Polish technology companies to reach that level of valuation on the public market.

Since then, the story has continued to unfold rapidly. At the time of writing, Creotech’s market capitalization is approaching PLN 2 billion, roughly doubling within a relatively short period.

Still, the more widely recognized benchmark in global technology markets lies further ahead.

Internationally, the term “unicorn” typically refers to companies valued at over USD 1 billion. At current exchange rates, this corresponds to a market capitalization of roughly PLN 3.6 billion.

Whether Creotech eventually reaches that level — becoming a true dollar-denominated unicorn — will depend on continued execution in its space infrastructure programs and on how the Creotech Quantum spin-off develops as a standalone company.

For now, it appears to be another milestone along the way rather than the final destination.

A final observation

What makes the Creotech story particularly interesting is not only the recent price movement, but the structural forces surrounding it.

Europe is entering a phase in which space infrastructure, secure communications, quantum technologies and cybersecurity are increasingly treated as elements of technological sovereignty.

In such environments, companies that manage to establish themselves early within strategic ecosystems often follow non-linear development paths.

This does not mean the road will be smooth. Markets rarely move in straight lines, and periods of consolidation or volatility are a natural part of the process.

But the combination of technological capability, strategic relevance and rising institutional visibility makes Creotech one of the more intriguing companies currently emerging in the European deep-tech landscape.

We will continue to monitor how this story unfolds.

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- Michał Rzepka, CyberMoat
Uncovering risks, securing opportunities.

Disclaimer

This material reflects personal views and is not investment advice. Positions may be held in securities discussed.

Introduction

Back in November last year, we published an extensive deep dive on Creotech Quantum — the planned spin-off from Warsaw Stock Exchange–listed Creotech Instruments (WSE: CRI).

At that time, CRI was trading at PLN 359 (19 November 2025). Our focus was primarily on the strategic implications of separating the quantum segment, but since then, developments at the parent company level have been equally noteworthy.

And they unfolded much faster than expected.

From late December onward, CRI began a strong upward move:

• PLN 400 at the beginning of 2026

• Above PLN 500 by mid-January

• An all-time high of PLN 618 on January 30

• Followed by a healthy correction toward ~PLN 500

• And a rebound to nearly PLN 600 at the time of writing

In less than three months, the stock delivered approximately +60% from the November reference point.

The 3-month total return trajectory is presented below (starting from 25 November 2025, PLN 359):

What surprised us was not the direction — the thesis was constructive — but the speed of repricing. Markets occasionally take years to recognize structural value. In this case, it took weeks.

This raises a natural question:

What exactly drove such a rapid revaluation?

Proof Over Promises

Between late November and mid-February, Creotech delivered an unusually dense sequence of operational and contractual milestones. The speed and quality of execution mattered — this was not one headline but a sustained stream of confirmations that reduced execution risk across multiple programs.

Below is a timeline of the most relevant developments since our November deep dive.

• On 26 November 2025, the European Space Agency accepted project documentation under the CAMILA review. ESA acceptance is more than procedural; it confirms that technical deliverables meet demanding European Space standards, reducing execution risk in an ongoing international program.

• On 29 November 2025, Creotech successfully established communication with three satellites of the PIAST constellation. PIAST is one of the company’s flagship programs. Establishing communication with all three satellites confirmed proper constellation functioning and demonstrated systems integration capability. This was a clear proof point of operational execution.

• On 12 December 2025, the Polish Agency for Enterprise Development recommended grant funding of PLN 26,236,378, which is roughly USD 7.3 million at current exchange rates. This represents non-dilutive capital, strengthening the company’s R&D capacity without impacting shareholders.

• On 18 December 2025, the Polish Armament Agency approved D1 documentation in the Mikroglob project. Completion of this milestone entitles Creotech to remuneration of PLN 51,706,851, or roughly USD 14.5 million. This was not just a technical step — it translated directly into contractual revenue.

• Also on 18 December 2025, the European Space Agency partially accepted three additional milestones within the CAMILA project, further confirming ongoing execution.

• On 19 December 2025, Creotech signed a contract for Phase A of a lunar orbital satellite mission titled “PHASE A FOR HIGH-RESOLUTION MINERALOGY MAPPER MISSION – EXPRO PLUS.” This expanded the company’s positioning beyond Earth-orbit systems and reinforced technological credibility.

• On 8 January 2026, Creotech signed a contract under the project “Multi-purpose Quantum Key Distribution receiver for optical ground stations.” Financially, the contract was modest. Strategically, it was important because it directly connects to Creotech Quantum’s positioning in QKD infrastructure — the segment we analyzed in November.

• Between 12 and 20 January 2026, the commissioning phase of the satellite platforms for PIAST-M, PIAST-S1 and PIAST-S2 was successfully completed. This effectively removed a major technical risk from the PIAST program. Markets tend to reward the reduction of execution uncertainty.

• On 12 February 2026, Creotech signed a contract with ESA for the first phase of the “LEO-PNT – HyperSat SAFIR-PNT” project (EUR 500,000 total value, EUR 400,000 funded by ESA), acting as prime contractor.

  The company considers this agreement strategically important, as it expands the application scope of its flagship HyperSat platform into the navigation satellite domain and may lead to follow-on contracts in subsequent mission phases.

• On 13 February 2026, Creotech announced a strategic partnership with Eutelsat for secure satellite connectivity in Europe. Cooperation with a major European satellite operator materially strengthens the company’s strategic positioning within continental secure communication initiatives.

Taken together, this was a cluster of validation events: grant funding, defense-related milestone monetization, ESA confirmations, operational satellite commissioning, strategic partnerships, and visible progress in quantum-related infrastructure.

The market repricing was not driven by narrative alone — it was driven by delivery.

In capital-intensive, high-technology sectors such as space infrastructure, credibility compounds over time. Over a short period, multiple major projects transitioned from “planned” to “executed.” That compression of execution risk is the most rational explanation for the rapid revaluation.

A Potential Game-Changer the Market May Be Underestimating

Execution explains the repricing so far. But one development may matter even more for the medium term.

We believe the market has not yet fully recognized the strategic significance of the recently announced partnership between Creotech Instruments, Creotech Quantum and Eutelsat.

Creotech Instruments S.A., together with Creotech Quantum S.A., signed a strategic partnership agreement with Eutelsat, one of Europe’s leading satellite operators. The cooperation framework is focused on European secure satellite connectivity programs, with particular emphasis on IRIS² — the European Union’s flagship initiative for secure communications infrastructure with a total budget of EUR 10.6 billion.

IRIS² (Infrastructure for Resilience, Interconnectivity and Security by Satellite) aims to deploy approximately 290 satellites in low Earth orbit (LEO) and medium Earth orbit (MEO) to provide secure connectivity services for EU governments, public institutions, businesses, and citizens. It is a cornerstone of Europe’s effort to strengthen technological sovereignty and strategic autonomy in critical communications infrastructure.

Under the signed agreement, the parties intend to cooperate in areas including:

• Development and adaptation of Creotech’s satellite platforms — including microsatellites and small satellites — to meet Eutelsat’s requirements for IRIS² communication missions and other European initiatives

• Joint development of mission concepts, system architectures, and operational solutions aimed at increasing resilience, redundancy, and independence of Europe’s communication infrastructure

• Potential involvement in both space and ground segments aligned with IRIS² architecture

The agreement also provides for an analysis of potential deliveries of space and ground subsystems, as well as complete systems, by Creotech Instruments and Creotech Quantum. This may include satellite platforms, avionics, secure communication subsystems, quantum components, and integration services. Key considerations explicitly mentioned are supply chain resilience, industrial scalability, and compliance with governmental and institutional requirements.

Importantly, discussions extend to collaboration in the field of quantum technologies and quantum-secured communications, including Quantum Key Distribution (QKD), Post-Quantum Cryptography (PQC), and hybrid security architectures for both space and ground segments. The intention is to jointly develop and test components and systems compatible with IRIS² and future European secure connectivity programs.

At this stage, the agreement constitutes a strategic cooperation framework and a letter of intent rather than a binding production contract. It does not yet translate into guaranteed revenue.

However, it formally positions Creotech and Creotech Quantum within the industrial dialogue surrounding one of the most significant European space infrastructure programs of the decade.

From a capital allocation perspective, this matters for three reasons.

First, it integrates Creotech’s HyperSat platform into a potential long-term European secure connectivity architecture.

Second, it connects the hardware segment with quantum-secure communications — directly relevant to the Creotech Quantum spin-off narrative. As the CEO of Creotech Quantum, Anna Kamińska, PhD said:
“Our cooperation with Eutelsat represents a unique opportunity for Creotech Quantum to develop and validate our solutions in quantum communications and cybersecurity. The IRIS² program enables us to demonstrate how quantum technologies can strengthen the resilience and autonomy of Europe’s critical infrastructure. At the same time, it creates opportunities for the growth of Poland’s space sector and local competencies, from design to system integration and testing. We believe our innovative approach will contribute to building secure, modern, and resilient satellite connectivity across Europe”.

Third, it anchors the company in demand segments tied to governmental and institutional security, which tend to be structurally more stable and strategically protected.

If execution follows and the cooperation evolves into concrete mission participation, this partnership could become significantly more important than its current financial footprint suggests.

Spin-Off Mechanics and Upcoming Listing of Creotech Quantum (April 17)

Creotech Quantum S.A. has published its prospectus (Source, PL only) in connection with the planned demerger of Creotech Instruments and the admission of its shares to trading on the regulated market of the Warsaw Stock Exchange.

The debut of Creotech Quantum is planned for 17 April.

The spin-off will transfer the organized quantum-related business segment — including all projects and intellectual property across QKD, PQC, Sinara quantum control systems, White Rabbit time synchronization, and advanced astronomical cameras — into Creotech Quantum as a standalone entity.

The transaction is structured as a demerger rather than a capital-raising IPO. Creotech Quantum will issue 2,854,347 new ordinary series B shares, which will be allocated exclusively to existing Creotech Instruments shareholders at an exchange ratio of 1:1.

For every one share of Creotech Instruments held, a shareholder will receive one share of Creotech Quantum, while retaining all existing CRI shares. No subscription, payment, or additional action is required.

As a result, the spin-off itself does not involve dilution or the raising of new external capital at the time of listing. However, as a growth-oriented technology company operating in capital-intensive segments, Creotech Quantum may require additional financing in the future to support scaling and commercialization.

From an investor’s perspective, there are two straightforward paths:

1. Become a shareholder before the demerger by purchasing CRI shares and receive Creotech Quantum shares via the exchange mechanism.

2. Wait until Creotech Quantum begins trading independently on or after 17 April and acquire shares directly on the market.

We do not speculate on short-term price behaviour following the listing. Spin-offs often experience volatility due to technical flows, portfolio adjustments, and initial price discovery dynamics.

However, it is worth recalling that the internal valuation of the quantum segment presented in the division plan implied a multiple materially below global peers operating in (somewhat) comparable quantum-adjacent domains. As discussed in our November analysis, the starting valuation appeared very conservative relative to the technological scope and strategic positioning of the business.

If market participants begin valuing Creotech Quantum as a specialized, pure-play quantum and secure communications entity — rather than as a bundled segment inside a broader space integrator — the repricing dynamics could become significant.

Whether that happens, and how quickly, remains to be seen.

- Michał Rzepka, CyberMoat
Uncovering risks, securing opportunities.

Disclaimer

This material reflects personal views and is not investment advice. Positions may be held in securities discussed.

Introduction

“Z władzą ludową nie będziesz się nudził” — roughly translated, “With the People’s Government, boredom was never the problem.” was a sarcastic saying commonly heard in communist-era Poland (1945–1989), when the country operated under a centrally planned system officially branded as “people’s rule.” In practice, it meant constant economic distortions, unpredictable regulations, shortages, policy experiments, propaganda campaigns, and periodic “reforms” that rarely solved the underlying structural problems. Stability was scarce, surprises were not.

We find it a surprisingly fitting analogy for the multitude of recent economic and political events unfolding across the world. From an economic perspective, the current global financial architecture — built on fractional-reserve banking and Keynesian orthodoxy — is at least as structurally absurd as the centrally planned systems it once claimed moral superiority over (or perhaps, on second thought, even more so — a subject we will, God willing, explore at a less hectic time).

From a political perspective, we have few illusions. What appears to be emerging is not classical totalitarianism in its crude, brutal form, but something more technocratic — smoother in language, more data-driven, yet similar in nature.

The parallels are not difficult to spot. One of them is the permanent absence of boredom. The emerging “World People’s Government”, together with its tech brothers (yes — communists were always fond of brotherhood, remember), is doing its best to ensure we remain constantly occupied.

This dynamic, of course, applies to financial markets as well — constantly generating new “opportunities.” Since we are currently rather busy, we will limit ourselves to a brief update on a few selected topics.

Gold Rush?

Recently, markets were shaken by sharp price swings in gold and silver, with silver posting particularly violent reversals.

At CyberMoat, we are not metal fanatics. In fact, we are somewhat skeptical about long-term investments in metals (a mildly surprising position for someone with Austrian leanings, perhaps).

Not because we despise gold — but for several structural reasons. Before listing them explicitly, let us share two broader observations.

First, metals — like most commodities and natural resources — tend, over the very long term, to become cheaper in real terms. The popular narrative of permanent scarcity is largely a myth. On a planetary scale, we have barely scratched the surface. What changes is not physical availability but the cost of extraction. Mining may become temporarily more expensive as we move to lower-grade deposits, but technological progress repeatedly offsets these pressures through efficiency gains. History shows this pattern again and again. There can certainly be short-term shortages — frost destroying coffee crops, geopolitical disruptions, energy bottlenecks — but these are cyclical distortions, not secular inevitabilities.

Second, gold does occupy a special category. Annual supply growth is low (typically around 1–2%), and production cannot be ramped up easily. There are solid reasons why gold served as money for thousands of years — and continues to serve as a reserve asset even for central banks that publicly discourage private ownership while quietly accumulating it themselves. In that sense, gold is structurally superior to most other commodities, including silver.

However, even gold has limitations as an investment asset.

1. It produces no cash flow. No dividends, no internal compounding mechanism.

2. Its “growth” is largely a function of fiat currency debasement. Measured in weakening paper currencies, gold appears to rise. However, that process is neither linear nor mechanically tied to official inflation prints. Central banks and large financial institutions can influence liquidity conditions, and the fractional-reserve nature of the banking system inherently produces economic cycles — credit expansions followed by contractions — which distort the debasement process. Gold does not move in a simple 1:1 relationship with money supply growth or CPI. It experiences prolonged periods of stagnation, sharp repricing phases, and sometimes multi-decade flat real returns. A glance at a 50-year chart makes this painfully clear:

   

   Gold peaked at approximately $850 per ounce in January 1980. An investor who bought at that level would have remained under water for nearly three decades in nominal terms — gold did not sustainably exceed that price again until 2008.

   Adjusted for inflation, the picture is even more sobering. According to U.S. CPI data (via in2013dollars.com), $850 in 1980 is equivalent to roughly $2,000 in 2005 dollars and over $3,200–$3,400 in today’s dollars, depending on the exact month used. Gold only convincingly surpassed that inflation-adjusted 1980 peak in 2023–2024 (two years ago!).

   In practical terms, an unfortunate buyer at the January 1980 high has only just — more than four decades later — recovered his original purchasing power.

   Scarcity alone does not guarantee smooth compounding.

3. Implementation risk exists. Physical gold involves storage, security, and transaction friction. Paper gold introduces counterparty and structure risk — ETFs, certificates, and derivative exposure may not always represent fully allocated, redeemable metal. The probability of failure may be low, but it is not zero. Physical ownership removes digital blocking risk and traceability, but introduces theft and custody risks. There is no perfect solution.

4. Finally, there is policy risk. Gold markets have historically been subject to intervention. Central banks control a substantial portion of global reserves. While large-scale price suppression would also harm their own balance sheets and is therefore unlikely under normal conditions, in extreme systemic scenarios one cannot entirely exclude aggressive measures — including forced sales or coordinated pressure.

Silver deserves a separate remark. Unlike gold, which sits heavily on central bank balance sheets, silver trades predominantly through leveraged futures markets. The structure is concentrated, and history shows that large institutions are not immune to misconduct (to put it mildly).

In 2020, JPMorgan agreed to pay $920 million in penalties to resolve charges of manipulating precious metals futures through spoofing practices — one of the largest such settlements in financial history (U.S. Department of Justice, Sept 29, 2020). The case demonstrated that even in supposedly deep and liquid markets, price formation can be distorted by dominant participants.

This does not prove systematic long-term suppression, but it does confirm that concentrated positioning, leverage, and aggressive order-book tactics can produce abrupt and violent price moves. In such environments, smaller investors often absorb the damage when cascades unfold.

If you are wondering about the events in the end of January ’26, we will merely recall the line often attributed to Mark Twain: history does not repeat itself — but it often rhymes.

None of this means we do not intend to benefit from the current cycle.

We do — but indirectly.

Rather than holding metal itself, we are selectively positioned in gold- and silver-related companies. We keep the specific tickers private, as these positions are relatively illiquid and time-sensitive; public discussion would add little value. This is cyclical, tactical exposure — a side operation alongside our core, quality-driven investment process.

BTC

When discussing crypto assets, one must first distinguish Bitcoin from the multitude of other coins. As Saifedean Ammous argues in his excellent book The Bitcoin Standard (Chapter 10, “Altcoins”), most alternative tokens resemble discretionary central banking — flexible supply, changing rules, governance committees, and monetary policy subject to human intervention.

Bitcoin, in contrast, operates without a central authority and follows a predefined monetary schedule embedded in its protocol.

From a purely economic perspective, Bitcoin’s supply dynamics are straightforward. The current annual supply growth is roughly 0.85% — already lower than gold — and it will not remain even that high for long. The next halving will reduce new issuance by 50%, and the process repeats approximately every four years until the terminal supply of 21 million coins is reached around the year 2140. With nearly 20 million already mined, more than 95% of total supply is effectively in circulation, while the remaining issuance declines asymptotically.

On paper, this creates a simple thesis: a strictly limited and increasingly scarce asset should appreciate over time if demand remains constant or grows.

But markets are not driven by arithmetic alone. They are driven by liquidity cycles, leverage, emotion — fear, greed, misunderstanding — and sometimes plain excess. Bitcoin is no exception.

The recent correction illustrates this dynamic. Despite alarming headlines, the move has been relatively contained by Bitcoin’s historical standards. From its peak above $120,000 to recent levels near $60,000, the drawdown is roughly 50%. Substantial, certainly — but far from unprecedented in Bitcoin’s history. More importantly, volatility appears structurally lower than in its early phases, when 70–80% drawdowns were not uncommon. Even traditionally “stable” assets can experience sharp dislocations: silver just recently had recorded single-session declines of over 30%, and companies widely regarded as ultra-conservative — such as Berkshire Hathaway — have endured drawdowns of roughly 50% on multiple occasions.

This suggests that, at least in terms of market structure, Bitcoin may be maturing.

That said, risks remain. Policy risk is obvious: governments retain regulatory leverage. Technological risk, while distant, cannot be dismissed entirely — advances in quantum computing, if ever capable of breaking current cryptographic standards, would pose a systemic threat (though mitigation pathways exist).

There is also the reputational overhang stemming from Bitcoin’s early days — anonymous origins, dark-web associations, and recurring conspiracy narratives. At various points, speculation — unsupported and widely debunked — has even attempted to link its creation to figures such as Jeffrey Epstein. Such episodes reinforce our point from yet different perspective: in a world where narratives spread faster than facts, “boredom” is rarely the problem.

SaaSPocalypse

SaaSPocalypse — a now infamous term first used on Wall Street by traders at Jefferies — described the violent sell-off in Software-as-a-Service stocks earlier this year. It wasn’t hyperbole: in a matter of days, hundreds of billions in market value evaporated as markets abruptly re-evaluated the durability of traditional software models.

The catalyst — at least in headline terms — was a seemingly innocuous set of AI tooling announcements from Anthropic. A new suite of tools designed to automate coding, research, and other workflows triggered sharp declines in shares of established software firms such as SAP, Salesforce, ServiceNow, and Workday.

What appeared to be just another product release crystallized a broader anxiety: that advanced AI could enable enterprises to build more software internally, drastically reduce the cost of custom development, and ultimately compress future demand for SaaS subscriptions.

Whether that fear is fully justified or partly reflexive is almost secondary. The market behaved as if it were real — and that reaction is the story.

Many of yesterday’s disruptors suddenly found themselves on the receiving end of disruption — not because capital mechanically migrated elsewhere overnight, but because expectations shifted. The acceleration of frontier AI — from OpenAI to ventures associated with Elon Musk — altered how investors perceived long-term defensibility across the software stack. Narrative gravity moved. Valuation multiples adjusted first. Business realities, as always, will adjust more slowly.

As we said before — z władzą ludową nie będziesz się nudził.

The markets were shaken once again. Power in capital markets is never static; it rotates. And when it rotates, valuations tend to adjust far faster than underlying business models.

As you may expect, at CyberMoat we do not subscribe to the simplistic thesis that “AI will disrupt everything.” It will disrupt many things — as technological step changes always do. Some companies will benefit, others will struggle. That is normal.

But the narrative that better code automatically destroys existing software businesses deserves scrutiny. Structural moats are not erased by a single release cycle. And valuation compression is not the same as business model extinction.

We do not have space here for a deep dive, so just a brief observation: it is not the code that makes a SaaS company great. Code, in itself, is not a durable competitive advantage. Any reasonably skilled team can write software. Yet not every software firm becomes Microsoft or Google.

Remember our Coca-Cola example when discussing Adobe? Any company in the world can produce a carbonated, sweetened beverage. The formula is not the moat — despite the mythology of the “secret recipe,” which is useful precisely because it distracts from the real source of advantage. Coca-Cola’s strength lies elsewhere: distribution, propaganda, brand, logistics, contracts, shelf space, and habit.

Software is similar: the real moat is not the code. The moat is integration into workflows, embeddedness in enterprise processes, customer support and service, regulatory compliance, contractual reliability, and accountability. It is one thing to generate a clever demo, but it is another to deploy a mission-critical system inside a regulated bank, ensure uptime, pass audits, integrate with legacy infrastructure, and stand behind it legally and operationally.

Do not assume that powerful, well-managed software companies will collapse simply because a teenager can “vibe-code” a prototype. If that were sufficient, markets would have been conquered long ago. What a teenager can build, thousands of others can build too. The real advantage lies elsewhere.

In short: code is not the edge. Distribution, trust, and security are.

For a high-level view of the drawdown, one reasonable proxy is the WisdomTree Cloud Computing Fund (WCLD), an ETF tracking a basket of cloud-focused software companies. Its main holdings are Fastly, DigitalOcean, Confluent, MongoDB and several others, top 20 listed below:

Another good proxy is Global X Cloud Computing ETF (CLOU) which tracks the ISE Cloud Computing Index, covering a broader set of cloud infrastructure and software players:

Large drawdowns often create opportunity for value investors. As Baron Rothschild allegedly said: “Buy when there’s blood in the streets, even if the blood is your own.”

But a word of caution is necessary. What may initially look like a bargain simply because the price has fallen sharply may not be a true bargain at all. Valuations in 2021–2022 were, in many cases, detached from economic reality. Similar, to smaller degree however, can be said about early 2025. A 50% or even 60% correction from an absurd price may merely return a stock to something resembling fair value — not deep value. In other words, one might be paying a normal price rather than securing a genuine margin of safety.

That said, we do believe real opportunities exist. In some cases, the sell-off appears excessive rather than merely corrective. Examples include Duolingo and Coursera, both of which we have recently added to our portfolio. We hope to share more detailed insights soon. Caveat emptor, however — do not replicate this move blindly unless you understand the risks and the underlying business models.

On a related note, the recent drawdown has — fortunately — also affected parts of the cybersecurity sector. As you may recall, we previously refrained from building positions in many cybersecurity names, as they were, in our assessment, either overpriced or, at best, fairly priced. That did not meet our investment risk criteria. This may have looked somewhat inconsistent — after all, CyberMoat focuses on investing and cybersecurity — but buying at inflated valuations is as much a mistake as ignoring opportunity elsewhere when prices are depressed.

Our objective is not to promote cybersecurity stocks at any cost. Our objective is to allocate capital prudently, generate returns, and sleep well at night.

There are several long-observed cybersecurity names now approaching levels that could justify entry. We are watching closely. Perhaps, finally, we may be able to step in — if price allows.

Data & Research Stack Update

Starting with this article, we are formally integrating StockAnalysis.com into the CyberMoat research workflow.

We have been using it privately for some time. This is not a trial run — it’s the result of deliberate testing.

What we were looking for was simple:

• One place for financial statements

• One place for ratios and valuation metrics

• One place for screening

• One place for portfolio tracking

• Clean interface

• Fast performance

• No unnecessary noise

In short: a focused, professional-grade research environment without platform bloat.

StockAnalysis delivers institutional-quality financial data while remaining lightweight and fast. It avoids the visual clutter and upsell-heavy design common across many financial portals. From a workflow perspective, it is one of the most efficient environments we’ve used.

The key differentiator, however, is pricing.

At standard pricing ($79/year), it is already materially cheaper than many alternatives offering comparable data depth. With the current 20% annual promotion:

• $63.20 for the first year

• Then $79 per year thereafter

• Monthly option: $9.99

At that level, the price-to-utility ratio becomes unusually attractive.

Historically, they rarely run discounts outside of Black Friday, so this is not a routine promotion.

For a serious investor who values speed, clean data access, and cost efficiency, this is a rational tool choice.

👉 https://stockanalysis.com/pro/?ref=cybermoat

Disclosure: CyberMoat participates in the Stock Analysis affiliate program. If you subscribe via our link, it supports the project at no additional cost to you.

Track Record – Cryptographic Commitments

Polish small caps – Positions opened Jan–Feb 2026

To ensure transparency while protecting liquidity and avoiding signaling risk, the following SHA-256 hashes represent timestamped commitments of two Polish small-cap positions initiated during Jan–Feb 2026.

These hashes encode the original disclosure strings (company identifier + purchase window + internal reference).

7a6fce2cabc9ad434be2b0f99f7301a42d6201f441367f7ea99bd0f6a622d623

1a3666cb348d9ed25f2c08e52e8f30caee7f30ba8a4464431b0a5aede346da92

- Michał, CyberMoat
Uncovering risks, securing opportunities.

Disclaimer

This material reflects personal views and is not investment advice. Positions may be held in securities discussed.

Introduction

Recently we introduced the ElevAIting Eleven and pointed to the rather extreme valuations these companies suffer from, distorting the stock market and creating an investment bubble whose burst seems imminent (we’ve just seen another potential catalyst: the Bank of Japan increasing the interest rate to 0.75% with a signal of an upward trend – a move that may soon generate outsized demand for soothing yoga sessions among distressed hedge fund managers).

We also briefly analyzed valuations of prominent members of the ElevAIting Eleven and explained that we’re not going to jump onto this peculiar ElevAItor – it would be like trying to leap onto a train running at full speed toward an abyss.

We did mention, however, that severe overvaluation in one part of the capital market likely leads to clear undervaluation in another – creating the opportunity to buy great businesses at very attractive prices.

This is especially important because, as investors, we’re looking not only for quality but also for a margin of safety, which is essential to minimize risk and increase long‑term returns. Risk management is an often overlooked aspect of investing – hopefully we can cover it on another occasion, as it goes beyond the scope of this article.

Adobe Systems

So now it’s time to look at the very first counterexample of AI‑mania stocks: Adobe Systems – a high‑quality company with a real business and real cash flows, deeply embedded in workflows and a golden standard for creative professionals: designers, illustrators, photographers, video editors, and digital artists.

Without doubt, Adobe generated a lot for its shareholders in the past. Since recently (after publishing its Q4 results on Dec 10) it became quite a hot stock, we’ll offer some more comments about it.

Adobe has also been caught in the crossfire of the recent AI‑mania, with skeptics questioning whether the company can defend its position as a wave of AI‑native competitors emerges. The concern is that generative tools will replicate key functions of Adobe’s creative suite, put pressure on pricing, and gradually weaken its long‑standing moat in design and content creation.

At the same time, this narrative often overlooks Adobe’s advantages: its massive installed base, deep integration into professional workflows, and the fact that it is embedding AI directly into its own products (e.g., Firefly) rather than waiting to be disrupted from the outside.

Of course, a swarm of potential competitors sprouting up like weeds might worry investors, but what many overlook is that most of these newcomers are likely just that: weeds. It’s not a quickly built piece of software that makes a great business. A great business is built on things like a strong organizational culture, deep integration with customers’ workflows, years of product refinement, and a reputation as the gold standard in its category.

Adobe has all of that: it is the default choice for creative professionals, it’s tightly embedded in countless corporate processes, and its ecosystem of tools, file formats, plugins, and training materials creates real switching costs.

We do not have a crystal ball and of course there’s a chance we’re underestimating some competitors. Still, we simply think it’s not that easy to compete with Adobe – just as it isn’t easy to beat Coca‑Cola, even though almost any company can produce a carbonated sugar drink. For Coke’s advantage doesn’t lie only in the recipe; it lies in brand, distribution, and decades of entrenchment supercharged by an almost unbelievable in its effectiveness, highly structured global propaganda. Adobe’s edge is similarly rooted in much more than just its current set of apps.

A look at numbers

When we looked at Adobe during those rainy autumn evenings, we had a (rather rare) feeling of absurdity: the more money Adobe generates, the cheaper the stock seems to get.

Let’s take a look at Adobe’s price history, along with its TTM Net EPS (Trailing Twelve Months Net Earnings Per Share) and the resulting P/E ratio:

Note: All valuation metrics below use data available at the end of November 2025, before most financial portals incorporated Adobe’s newly reported Q4 and full‑year FY2025 results (fiscal year ending November 28, 2025).

Just think about it: two years ago, Adobe was trading at around $611 per share, with TTM Net EPS of $11.81.

Fast forward to now: at the end of November 2025, Adobe was down to $320.13 – nearly half of what people were willing to pay in November 2023:

Did something go wrong within these two years? Did the company lose its earnings, perhaps?

Oh no. It actually makes more than back then: $16.71. That means Adobe now generates about 41.5% more profit, while the stock is almost 48% cheaper. Such abnormal fluctuations seem to happen only on capital markets, with P/E going from ~52x to ~19x.

Disclaimer: we observed Adobe for quite a long time and were quite lucky to buy it in last week of November which happened to be near a bottom, with the price averaging ~$318 per share. Of course, we did not know where the bottom is - but we knew we’re buying very cheap.

We expected Adobe to perform well (and actually many analysts did, at Yahoo Finance Forward P/E was only 13.7x for 11/30/2025) but the results of Q4 published on December, 10 went above the expectations. To quote directly from the report: “Adobe achieved record revenue of $6.19 billion in its fourth quarter of FY2025, which represents 10% year-over-year growth as reported and in constant currency. Diluted earnings per share was $4.45 on a GAAP basis and $5.50 on a non-GAAP basis.” (Note by CyberMoat: EPS is for the quarter).

Buybacks as smart capital allocation

We also liked Adobe’s management aggressive buyback program. In 2023 the company repurchased approximately 11.5 million shares, in 2024 around 17.5 million shares, and then in 2025 – when the stock was by far the cheapest relative to its recent history – a massive 30.8 million shares. We consider this a great example of capital allocation: management leaning in when the odds are finally skewed in shareholders’ favor.

For balance, one could also argue that this pattern is indirect evidence that earlier repurchases were done at too high a price, potentially destroying value. Of course, we don’t know how management perceived Adobe’s intrinsic value back then versus now, but we have our own estimate – and on that basis we are much more comfortable with the aggressiveness of the 2025 buyback than with the timing of the earlier ones.

Since buybacks, especially aggressive ones, may distort other measures like earnings-per-share (less shares in circulation → automatically more profit per share), one should also ensure that we get the picture right. After all, earnings can be “engineered” via various accounting tricks or get impacted by exactly the kind of buybacks we just mentioned.

To avoid such distortions, let’s switch to another metric, Free Cash Flow (FCF), that shows how much cash the actual operations produce – since we always remember that, after all, cash is king.

And there is good news here: Adobe was, and remains, a cash‑making machine with impressive FCF growth, a strong proof that we’re looking at what we truly could call a great business.

Just look at the FCF chart – it’s a textbook example of quality investors’ preference for businesses that consistently compound free cash flow per share over long periods.

Note: The chart above is sourced from finbox.com and shows FCF per share, which finbox defines as levered free cash flow on a per common share basis. Since terms like “free cash flow” can vary across sources and Adobe itself emphasizes operating cash flows, we use these figures primarily to illustrate the general trend in cash generation rather than as a strict, universally standardized metric.

Overall View

And for completeness, looking at Adobe’s Enterprise Value / Free Cash Flow, we can see that in November 2025 it was trading at historical lows (Adobe’s EV/FCF hit 13.6x at 28 Nov), underscoring how cheaply the market was pricing each dollar of the company’s free cash generation relative to prior years:

This confirms our view that Adobe is making more money than ever while having recently traded at valuation lows.

The strong results published just a couple of days ago, and the subsequent price spike (Adobe closed at $355.86 on Dec 19), are perhaps the first clear signal of how undervalued the company was. At CyberMoat, we don’t pretend to predict the future, but we believe Adobe still has meaningful upside relative to our estimate of fair value.

This is one example of what we see as a clear undervalued opportunity outside the generally overpriced ElevAIting Eleven. We’ll highlight a few other such ideas (including some we’ve already hinted at) another time—stay tuned.

- Michał, CyberMoat
Uncovering risks, securing opportunities.

Recently we were talking about overvaluation in the stock market in general, with its main driver being the “ElevAIting Eleven” – 11 stocks that together make up about 40% of the S&P 500 index. This matters a lot, as the S&P 500 represents roughly 70–80% of the total U.S. stock market capitalization, which in turn accounts for more than half of the entire world’s market cap.

We demonstrated that the market is definitely overheated, with the Buffett Indicator at a historical high of around 224%.

This is obviously not a good environment for a cautious investor, as with extreme valuations the risk is close to extreme, while the potential return is minimal. That doesn’t mean it’s impossible to make money – it simply means that, on average, the odds are stacked against you and the probability of a loss is elevated when we talk about the market in general, for example when investing in an index like the S&P 500. To give you some idea: out of each dollar invested in the S&P 500, roughly 40 cents goes to fuel our ElevAIting Eleven – not a great distribution, regardless of the potential quality of these companies.

But let’s take some look at the companies in question, to give you just an idea how they compare vs market and vs history.

Overview of rough valuation - ElevAIting Eleven

When one attempts to value a company, proper measures are needed. There are many indicators used by investors in the analysis process. The one most widely used (although having its deficiencies) is the price-to-earnings ratio (P/E), simply calculated as:

P/E Ratio = Share Price / Earnings per Share

or alternatively:

P/E Ratio = Market Cap / Net Income

One intuitive way investors often think about the P/E ratio is as a very rough “payback period.” If a stock trades on a P/E of 20, you are effectively paying $20 for every $1 of the company’s current annual earnings. If those earnings stayed flat and were fully paid out to you, it would take about 20 years for the company to earn back the price you paid.

Of course, in the real world earnings change, companies reinvest instead of paying everything out, and inflation matters, so this is only a mental model – not a formula – but it helps anchor what a given P/E actually feels like.

While this measure is not perfect, let’s stick to it in our simple overview to get a very general idea of how the market values the companies in question right now.

NVIDIA

Let’s start with the brightest (and heaviest, market-cap‑wise) company from the ElevAIting Eleven: NVIDIA.

A quick look at the P/E chart dating back to late 2011 may at first give the impression that NVIDIA is not very expensive:

NVIDIA PE ratio as of December 15, 2025 is 45.79 (source).

While this is not a stratospheric multiple for a company like NVIDIA, it is still rather a demanding one. Using our mental model, it means we’re willing to pay almost $46 today for every $1 of NVIDIA’s current annual earnings. In other words, if earnings stayed flat and were fully paid out, it would take more than 45 years for the company to “earn back” the price we’re paying.

A comment for those primarily looking at charts: at first glance, NVIDIA’s P/E chart can be quite misleading for inexperienced or hot‑tempered investors. There is a sharp spike around 2023–2024, driven by a brief but extreme disconnect between price and reported earnings. That spike pulls the visual “average” way up and makes today’s valuation look almost moderate.

The reality is more nuanced. Yes, today’s P/E is below that spike and slightly below the recent historical average – but it still represents a hefty price tag. Even after the AI‑mania excess has cooled a bit, you are paying a demanding multiple for NVIDIA’s current earnings. Given the company’s quality and unique position in the AI ecosystem, this may be one of the closer‑to‑normal valuations among AI leaders – but it is certainly not a cheap stock.

Apple

Now let’s look at Apple. No surprises in the P/E chart – it clearly shows where we are: firmly in the “expensive” camp.

Apple’s P/E ratio as of December 15, 2025 is 36.69.

It trades at roughly 36–37× earnings, which is near its historical highs. Compare that with the P/E when Buffett was building his position: Berkshire first bought Apple in the first quarter of 2016, when the stock was trading at roughly 10–15× earnings – a far cry from the multiples investors are willing to pay today.

Perhaps we are blind to something and can’t see Apple’s potential – but it rather looks to us that Apple on the eve of 2026 is in a very different situation than it was in early 2016.

When Berkshire started buying Apple in early 2016, this was not some overlooked niche player. Apple was already one of the largest, most profitable companies in the world – but the market largely treated it as a cyclical hardware business approaching “peak iPhone”. The stock traded at roughly 10–15× earnings, as if growth were about to stall permanently. In hindsight, that was exactly the moment when Apple’s true potential – the installed base, services, and ecosystem lock‑in – was about to be recognized and re‑rated by the market.

Back then, the business was strong and underappreciated, while the valuation was modest. Today, we’d argue the opposite: a business that feels less dynamic and innovative than in the past, paired with a valuation that assumes it will still be one of the main winners of the AI era. Will it?

To sum up, a current P/E of around 35+ looks really demanding. Perhaps that is part of the reason Warren has cut Berkshire’s position substantially.

Broadcom

Next, let’s look at Broadcom. As with NVIDIA, a quick glance at the P/E chart suggests there may have been at least one period of temporary disconnect between price and reported earnings – a familiar pattern in this cycle.

Let’s fix it by mentally skipping that anomaly and focus on the more recent history from 2018 onward:

Looking at the chart starting in 2018, Broadcom’s P/E gradually climbs from low double digits into the 30–50× range, before spiking above 100× in 2024 and then settling back down. Even if we ignore the brief trip into triple‑digit territory as another earnings/price mismatch, the “normal” range over the last few years still looks elevated by historical standards.

Broadcom PE ratio as of December 15, 2025 is 60.68.

Using our mental model, that means we are paying over $60 today for every $1 of Broadcom’s current annual earnings. In other words, if earnings stayed flat and were fully paid out, it would take more than 60 years for the company to “earn back” the price we’re paying. That is a clearly demanding multiple, even if we imagine Broadcom is a high‑quality infrastructure player – and we are not fully convinced it deserves that label.

Palantir Technologies

The last of the ElevAIting Eleven we wanted to look at is Palantir Technologies. This one is especially interesting, because it may be a perfect example of how AI hype can drive arguably unreasonable expectations.

Palantir only very recently crossed into GAAP profitability. 2023 was its first fully profitable year, and by late 2023 it had finally strung together the four consecutive profitable quarters needed to become eligible for S&P 500 inclusion – a milestone Alex Karp proudly highlighted in the Palantir Q3 2023 shareholder letter. In other words, the company just managed to show “official” break‑even at the precise moment when index eligibility became a big narrative.

You don’t have to be a conspiracy theorist to suspect that at least part of this sudden “profitability” story is cosmetic. When a business is hovering around break‑even, relatively small shifts in assumptions – around stock‑based compensation, capitalization versus expensing of development, or the timing of revenue recognition – can flip the bottom line from red to black without any fundamental change in the underlying economics. This is very close to what Michael “The Big Short” Burry has been warning about in his recent short thesis on Palantir and Nvidia, arguing that much of the apparent profitability in some AI darlings evaporates once you treat stock‑based compensation and aggressive accounting choices as real economic costs rather than harmless add‑backs (Moneycontrol).

As of December 15, 2025, Palantir Technologies’ P/E ratio is 538.97. (!!!)

It is an absurd number, because the valuation itself is absurd: a company that has only just made it into the S&P 500 during the peak of the AI hype cycle now carries a market capitalisation near $450 billion, on roughly $3.9 billion of trailing‑twelve‑month revenue as of September 2025.

From our perspective, the idea that a business with such a thin and recently achieved earnings record has already been welcomed into the S&P 500 says more about the current cycle than about Palantir’s true quality. Yes, by the index rulebook Palantir is now technically an “earning” company – but only just, and in a way that still feels fragile.

There is also a genuine tension here. On one hand, Palantir looks like a real business with cutting‑edge technology, high switching costs, and improving cost discipline. Its moat is impressive, and its quality metrics are even more so: free‑cash‑flow margin around 46%, fast growth, and strong long‑term prospects. Palantir is a great company and possibly a genuine compounder in the future. On the other hand, no tree grows to the sky. Even a strong, defensible business can be priced so aggressively that the investment case becomes fragile. With an extremely high valuation like Palantir’s, the odds are high that the “sky” may have been reached sometime around late October 2025.

If you look at Palantir’s P/E chart, the line sits at 0 up to mid‑2023 and then suddenly explodes into triple digits.

That doesn’t mean the market only noticed Palantir in 2023. It simply reflects the fact that Palantir was loss‑making for most of its public life, so a P/E ratio (price divided by positive earnings) was undefined. Once the company finally turned GAAP‑profitable, even a small profit on an already‑elevated share price produced a huge P/E print.

P/E is therefore a blunt tool for a “just‑turned‑profitable” company like this. However, if we switch to a cleaner metric for this stage of the business – price‑to‑sales (P/S) – the picture doesn’t suddenly become reassuring:

To the contrary, Palantir trades at a very high multiple of its revenues, which reinforces the point that today’s valuation embeds extremely optimistic expectations and looks truly elevated, if not outright absurd, relative to current fundamentals.

A broader observation here: investing always comes with risk, even in solid, consistently profitable businesses. With companies that are only barely at break‑even, those risks are amplified. Earnings forecasts are, by definition, just educated guesses about the future. When you buy a business with a long history of robust profits, you at least have some evidence that the machine works. When you buy a company that has recently engineered its way into a thin sliver of profitability, you are placing far more weight on projections, narratives, and hope. In Palantir’s case, you may be doing that and paying an eye‑watering multiple for the privilege.

So… is it safe to jump onto this ElevAItor?

We briefly took a look at several prominent companies from our ElevAIting Eleven list — Nvidia, Apple, Broadcom and Palantir — and examined their situation in the current market environment.

In the previous article we left you with a question:

“So, is it safe to jump onto this ElevAItor?”

Having now looked more closely at valuation through the lens of P/E (and, where P/E is useless, P/S), we can finally answer.

Across the ElevAIting Eleven, three patterns keep repeating:

1. Great businesses, demanding prices.
   Names like Nvidia or Palantir may well be real businesses with strong technology, sticky customers, and attractive economics. Some are likely to be long‑term winners. But at 40‑plus earnings or 500‑plus earnings, you are not just buying quality, you are also buying a very specific view of the future. There is very little room for disappointment.

2. Accounting smoke around fragile profitability.
   Some of the ElevAIting Eleven are still just‑turned‑profitable on GAAP numbers, or rely heavily on adjustments and assumptions that can flip the story from loss to profit without any change in underlying cash economics. When the narrative leans this hard on adjusted metrics and index eligibility, caution – not FOMO – is usually the better instinct.

3. Cycles, not straight lines.
   AI is real (although not as perfect as many imagine), important and here to stay. But markets price stories in straight lines. Trees, as grandma reminds us, do not grow to the sky. Even if many of these companies continue to compound over time, the path for shareholders from today’s valuation starting point may involve long periods of dead money at best or very real drawdowns.

On top of this, there are now multiple warning signs that we are entering the final phase of an AI bubble. As quality‑focused investors, cautiously dealing with our own – and especially with other people’s – money, we would not be jumping onto that ElevAItor at this stage. On the contrary, we would be jumping out and staying away until the market cools down – most likely amid fletus et stridor dentium, the weeping and gnashing of teeth that accompanies a painful unwind when a catalyst finally arrives and the bubble bursts.

For patient investors, the more sensible stance is to:

• respect the technology and the business quality where it exists,

• keep these names on the watchlist,

• and wait for prices – or expectations – to come back down to earth.

The ElevAItor will probably still be there after the next correction, although a bit tweaked and regrouped perhaps. Your capital will be too, ready to deploy, which is the whole point.

And if you prefer to stay fully invested, in our view there are several safer, higher‑quality bets currently priced very attractively. Capital is like liquid in communicating vessels: it had to rush into AI from somewhere1, and those “somewheres” — the parts of the market it rushed out of — are exactly where today’s opportunities are likely to be hiding.

Perhaps we can talk about it next time!

- Michał, CyberMoat
Uncovering risks, securing opportunities.

It’s always a risky undertaking to predict the future of the markets. The only truly safe forecast is to echo the famous anecdote about J.P. Morgan, who, when asked about the stock market’s future, simply replied: “It will fluctuate.”

Still, we need some way to understand where we are and whether the market, in aggregate, is expensive or not.

This is not a deep, comprehensive analysis—just a few reflections.

So, what’s the weather like today? Is the market expensive in December 2025?
In short: yes and no.

Buffett indicator

Let’s start with the so‑called Buffett indicator, a measure popularized by one of the most successful investors of all time. It compares the total value of a country’s stock market to its gross domestic product (GDP), giving a high‑level sense of whether equities, in aggregate, are cheap or expensive relative to the size of the real economy.

A quick note on scope: even though we’re talking here about the overall “market weather,” the classic Buffett indicator is defined for specific countries. In his original remarks, Buffett referred to the ratio of total market cap to U.S. GNP, but most contemporary implementations (including the sources we use here) now use GDP instead. For that reason, in this section we’ll focus on the United States – the largest and most influential equity market, and roughly 60% of global stock‑market value as of late 2023–2024 (see Visual Capitalist).

There are now attempts to generalize this “Buffett indicator” framework to other countries and even to a global aggregate – for example, GuruFocus tracks market‑cap‑to‑GDP ratios across major markets and a global composite – but the original and cleanest version is still the U.S. case.

When you look at the Buffett indicator for the U.S. today, it is extremely elevated. According to GuruFocus, the ratio of total U.S. market cap to GNP stands at about 224.1% as of December 2025, essentially matching its all‑time high (the previous peak was roughly 224.2% in November 2025). That puts the U.S. market in the “Significantly Overvalued” bucket – we’d be comfortable describing it as strongly or even extremely overvalued. For comparison, during the dot‑com bubble peak in early 2000 the Buffett indicator was materially lower than it is today, even though that period is now a textbook example of an equity bubble.

That obviously begs the question: are we in a bubble right now? Before we get into that, it’s worth looking at the structure of the market. The Buffett indicator only tells us about the total market value; how that value is distributed can lead us to slightly different conclusions.

S&P 500

The most widely-used benchmark for U.S. stock investing is the S&P 500 index. While the full rationale for its prominence is a topic for another discussion, for now the important one is its sheer size: the S&P 500 alone represents roughly 70–80% of the total U.S. stock market capitalization, and therefore dominates broad “total market” indices such as the Wilshire 5000. In other words, when we talk about “the U.S. market”, we are mostly talking about the S&P 500 anyway. And even if we often look for great companies outside the S&P 500, its weight is still of key interest, simply because this is where most of the capital gets allocated. The structure of that capital allocation is especially important in times when bubbles are suspected.

As of S&P 500, from its bear‑market low around 3,600 in 2022, it has more than recovered and gone on to set a long series of new all‑time highs in 2024 and 2025 (the index is now above 6,800 as of December 2025; see, for example, price history here: https://www.investing.com/indices/us-spx-500-historical-data). In other words, by any conventional benchmark, U.S. large‑cap equities are trading at or near record levels, mind you, in relatively short time-span (it is important due to inflation concerns).

This is visible on the very basic chart (for last 30 years):

Be aware that it is logarithmic view, things get really clear when going linear:

Coming back to inflation. Using a single dataset (OfficialData’s CPI and S&P 500 total‑return series), cumulative U.S. consumer price inflation from 2022 to 2025 comes out to roughly 10–11%, which corresponds to a CPI compound annual growth rate of about 3–4% per year over this three‑year window (see: OfficialData – inflation).

Over a slightly longer window in the same era – from early 2022 to mid‑2025 – the S&P 500 has delivered a total return of about +48%, or roughly 11–12% per year with dividends reinvested (see: OfficialData – S&P 500).

To sum up:
– Inflation CAGR (2022–2025 CPI): ~3–4%
– S&P 500 CAGR (early 2022 to mid‑2025, total return): ~11–12%

That’s a pretty big gap between price growth and underlying inflation over a relatively short time span.

And we can see it on the chart, too. Below is the S&P 500 adjusted for U.S. inflation (the formula used in TradingView is SP:SPX/ECONOMICS:USCPI).

A different way to see the same point is to look at GuruFocus’s inflation‑adjusted S&P 500 chart, which plots the index together with its long‑term average and a “normal” band around that average (one standard deviation). Today’s inflation‑adjusted S&P 500 is not just above its historical mean—it is far, far beyond this usual band. In plain language, the current real price level is statistically extreme relative to what has been normal over past decades, even after accounting for inflation.

So, put bluntly: if someone is telling you this market is “not expensive”, they’re probably selling.

The ElevAIting Eleven

We started with the global equity market, then focused on the U.S. (which accounts for well over half of global stock‑market value), then narrowed further to the S&P 500 (which captures the bulk of U.S. large‑cap equities). Now let’s look at what actually drives the S&P 500 itself.

The S&P 500 is not an evenly balanced basket of 500 companies; it is heavily dominated by a handful of mega‑caps. As of late 2025, the so‑called “Magnificent 7” (Apple, Microsoft, Alphabet, Amazon, Meta, Tesla and Nvidia) alone account for well over a quarter of the entire index’s market value, and the top twenty constituents together make up almost 50% of the index (49.84%, to be precise).

This is astonishing: just 20 top companies make up nearly half of the entire index!

But that’s for the top twenty companies, a group that also includes more traditional conglomerates like Warren Buffett’s Berkshire Hathaway or Johnson & Johnson. We therefore decided to tweak this 20‑stock group: starting with the Magnificent 7 and then extending it to include a few other AI‑related and likely overvalued names, while excluding more “boring” blue chips such as Berkshire or Visa. The final group looks as follows:

• Nvidia,

• Apple Inc.,

• Microsoft,

• Amazon,

• Alphabet Inc. (Class A),

• Broadcom,

• Alphabet Inc. (Class C)1,

• Meta Platforms,

• Tesla, Inc.2,

• Oracle Corporation

• and Palantir Technologies.

With this adjustment, we end up with eleven stocks—the ElevAIting Eleven—that together represent almost 40% of the S&P 500 by weight (39.84% in my snapshot)3. In other words, when the S&P 500 makes new highs, a very large share of that move is being driven by a tiny group of AI‑ and tech‑related giants, not by a broad, evenly shared boom across the corporate sector.

So, is it safe to jump onto this ElevAItor?
Stay tuned for the next part — though we suspect you already know what our answer will be.

- Michał, CyberMoat
Uncovering risks, securing opportunities.

In recent days, it is becoming more and more clear that the AI bubble is about to burst. I don’t know the future, but tech valuations are painfully high (which is why I shifted some investments toward other sectors, as disclosed here, and why I now focus only on truly superior tech companies — and only at a fair price — as explained here).

Regardless of what happens when the AI bubble deflates, you can be sure about one thing: despite all the tech talk about singularity and transhumanism, human nature does not change. And what does that mean for us? You can expect new bubbles to come!

In some circles, people already claim that quantum computing will be the next big bubble. I wouldn’t state that with certainty—especially since a smaller wave of hype has already come and gone—but it’s true that enthusiasm around quantum technologies has been building for years and keeps resurfacing. The “advent of quantum computing” has been announced multiple times, often with confident statements that we’re just “five years away”. Those promises have been around for at least a decade, and yet scalable, fault-tolerant quantum computers remain a distant prospect.

While quantum computers remain many years — if not decades — away, one part of the quantum ecosystem is already in the commercial phase: Quantum Key Distribution (QKD). Unlike speculative quantum computing roadmaps, QKD is an established, deployable technology used today in secure communication networks, government infrastructures, and critical industries. Telecom operators are rolling out quantum-secured links, the EU is building its own EuroQCI network, and some companies already sell turnkey QKD systems. In other words, this is not theory — it’s an operational, revenue-generating segment of the quantum landscape. And this is precisely where our focus turns next.

Enter Creotech Quantum.

I promised (see the Manifest) that sometimes we’ll look into non-obvious places — including spin-offs and businesses buried inside larger entities.

So here is one: not purely cybersecurity, but close enough to deserve attention.

Why “hidden”? Because you still can’t buy this company directly, even though it already exists as an independent entity. It has been carved out from its parent but is not yet publicly traded, so the only way to gain exposure is indirectly through the parent company.

The company in question is Creotech Quantum — a business that has already been formally separated from Creotech Instruments S.A. (CRI) and is now preparing for its public-market debut.

Before we dive into the quantum part, it’s worth starting with the parent company. For now, if someone wants exposure to Creotech Quantum, it can only be achieved by holding CRI shares.

Creotech Instruments — the Parent Company

Creotech Instruments is a Poland-based deep-tech company specialising in advanced space technologies, high-reliability electronics, and specialised hardware, including components used in quantum systems.

The company is the designer and creator of the proprietary HyperSat multi-purpose microsatellite platform intended for space missions. Its core activities include the design, production, and sale of advanced subsystems and systems used across several high-technology domains.

Operationally, the business is structured into four segments:

1. Space – designing, manufacturing, and selling subsystems and systems used in the space industry, including satellite components and complete microsatellite solutions based on the HyperSat platform.

2. Geospatial – developing systems for drone-operation management and for the generation, processing, and distribution of satellite and UAV data.

3. Quantum Systems [now → Creotech Quantum S.A.] – designing and producing subsystems and systems used in quantum computers, quantum cryptography (including QKD), time-synchronization systems, and other scientific or research applications.

4. Manufacturing – providing contract manufacturing services for industrial-grade electronics tailored to customer specifications.

Across these areas, the company supplies hardware and high-reliability electronics to space agencies, scientific institutions, commercial operators, and enterprises requiring advanced satellite, quantum, or geospatial solutions.

Customers worth particular mention?

• European Space Agency (ESA) — Creotech delivers subsystems and has secured contracts with ESA.

• European Organization for Nuclear Research (CERN) — Creotech has supplied advanced electronics/control hardware for scientific research.

Creotech Instruments - General Info (*)

• 🏢 Company name: Creotech Instruments S.A.

• 🏛️ Stock exchange: Warsaw Stock Exchange

• 🆔 ISIN: PLCRTCH00017

• 🔖 Ticker: CRI.WA

• 📈 Stock price: PLN 359 (≈ $97 at time of writing)

• 💰 Market cap: ~PLN 1024M (≈ $276M)

*Note: This applies to Creotech Instruments, the parent company. Our focus will be on Creotech Quantum, the soon-to-be in market spin-off.

Here’s a chart of Creotech Instruments (a parent company) for last year (courtesy of Yahoo Finance).

1. Business Description

When it comes to Creotech Instruments, the parent company, here comes just a short recap:

• Poland’s leading space & deep-tech hardware company

• Known for satellite subsystems, high-reliability electronics, FPGA-based systems

• Long-term ESA/CERN collaborations

• Reputation for engineering quality and government-grade projects

Now let’s move to its Quantum Systems division — recently carved out as Creotech Quantum S.A.

Established in June 2025, the new company builds its business on four core pillars:

1. Secure Communication (QKD)

Quantum Key Distribution systems based on fundamental laws of quantum physics, enabling communication security that cannot be broken by quantum computers or any current or future classical computing methods.

2. Quantum-Processor Control & Error Correction (Sinara)

Control systems for commercially built quantum computers, based on the Sinara family of electronics, along with the development of cryogenic integrated circuits for managing ion-trap processors (a project under the EU’s Quantum Flagship programme).

3. Precision Time Synchronisation (White Rabbit)

Hardware solutions enabling distribution of an atomic-clock-grade time and frequency reference within critical infrastructure, while simultaneously transmitting classical data over the same medium.

4. Astronomical Cameras

Development of the advanced CreoSky 6000 SST astronomical camera, designed for ground-based observational applications, including observatories and QKD ground stations.

It is the QKD systems segment that is especially interesting. Why did it catch our attention? Because it sits directly at the intersection of quantum technologies and cybersecurity — which makes it very much “our” domain here at CyberMoat.

A look into CIA & QKD

When discussing the pillars of cybersecurity, we often talk about CIA triad, which is one of the core foundational models in information security. It defines the three fundamental goals of cybersecurity: Confidentiality (ensuring that information is accessible only to authorized parties), Integrity (ensuring that information is accurate, unaltered, and trustworthy) and Availability (ensuring systems and data are accessible when needed).

One of the key mechanisms used to achieve Confidentiality—and indirectly support Integrity—is encryption, which protects data by transforming it using cryptographic keys.

Traditionally, organizations rely on symmetric encryption (fast and efficient, but requiring both parties to somehow share the same secret key) or asymmetric encryption (stronger for secure key exchange but significantly slower and more computationally expensive). This creates a fundamental tension: symmetric cryptography is highly performant but suffers from the classic key distribution problem, while asymmetric cryptography solves key exchange but introduces overhead and scalability issues. (And, let’s add, while asymmetric cryptography offers very strong protection against traditional computers today, it is expected to be easily broken by sufficiently powerful quantum computers in the future).

This challenge around how to securely establish encryption keys in the first place is exactly where Quantum Key Distribution (QKD) enters the picture—providing a radically different, physics-based method of exchanging keys with provable security guarantees and no reliance on computational hardness assumptions.

So what exactly is Quantum Key Distribution (QKD)?

QKD is a quantum-physics-based method for securely exchanging encryption keys.

It relies on the behavior of photons (for example, their polarization) and on a fundamental rule of quantum mechanics: measuring a quantum state inevitably disturbs it.

This leads to a powerful security property:

• If an attacker tries to eavesdrop on the quantum channel

• The quantum states of the photons change

• And the communicating parties can immediately detect the intrusion

This gives QKD a unique advantage: you can detect interception.

QKD is designed not for everyday consumer use, but to protect extremely sensitive and mission-critical systems—the kind operated by governments, intelligence agencies, military infrastructure, and national financial backbones. In an era of rising geopolitical tensions, states are increasingly wary of relying on foreign cryptographic hardware or software that could contain hidden vulnerabilities, backdoors, or simply be weakened by future quantum breakthroughs. QKD offers an alternative: a security mechanism rooted not in mathematical assumptions or vendor trust, but in the fundamental laws of physics. For countries seeking technological sovereignty and long-term strategic assurance, this creates a niche where QKD becomes not just useful, but strategically irresistible. Needless to say, this creates a wide moat for companies such as Creotech Quantum.

Creotech Quantum leads eCAUSIS, an EU-funded programme developing a fully European QKD system — including the devices, key components, network-integration software, and a complete key-management system (KMS). In 2025 the company continued work on its second, smaller QKD module and presented the system publicly during QCI Days in Athens. The commercial launch is planned for 2026, making it one of the very few Europe-made QKD products. Creotech Quantum owns 100% of the IP, giving it full control over further development and commercialisation.

The company is also delivering three QKD-related projects for the European Space Agency (ESA), focused on ground-station components and measurement systems. This builds its capability to integrate QKD infrastructure for both public institutions and high-security commercial clients, such as critical-infrastructure operators, banks, and energy networks.

While QKD systems are likely to be the most important part of Creotech Quantum’s offering, the company is active in several other layers of the quantum-technology stack. These are not quantum computers themselves — which, for now, exist mostly as experimental prototypes with far too few stable qubits to be economically useful — but rather the infrastructure and components that the quantum ecosystem depends on. And it may well turn out that, especially if a “quantum bubble” inflates in the coming years, the best businesses will resemble the gold-rush era: the companies selling shovels, not necessarily the ones digging for gold.

Quantum Control Systems

Creotech Quantum develops high-precision control and measurement electronics intended for quantum-technology research and development laboratories. These systems operate at the “control layer” of the quantum stack: generating low-noise signals, synchronising measurements, and interfacing with the hardware environment that underpins qubit platforms.

This is a real market today — every quantum-research lab, corporate R&D project, or early-stage quantum-processor initiative requires such systems long before a commercially meaningful quantum computer exists. Creotech competes here with established players like Zurich Instruments and Quantum Machines, but offers a fully European alternative with its own engineering strengths.

White Rabbit Time-Synchronisation Systems

Another product line entering the quantum spin-off is based on White Rabbit, a time-synchronisation technology originally developed at CERN. White Rabbit enables sub-nanosecond accuracy across distributed systems over standard fibre networks.

This capability is valuable in telecom, finance, scientific facilities, and industrial automation — anywhere precise timing is essential. Creotech recently joined the global White Rabbit Collaboration, positioning the company within the standard-setting and development process of this highly specialised infrastructure technology.

Scientific Cameras and Advanced Electronics

Creotech Quantum will also offer high-sensitivity, high-speed scientific cameras and specialised electronics used in research, metrology, and industrial environments. While narrower in scope, this segment leverages the company’s long-standing expertise in high-reliability electronics developed for space and scientific applications. It also provides a steady, non-speculative revenue component within the broader deep-tech portfolio.

2. Quality Of The Management

Creotech Quantum will be led by Dr Anna Kamińska, one of the most experienced quantum-technology leaders in Poland and a long-standing pillar of its parent company, Creotech Instruments. With over eight years driving the company’s quantum initiatives, she has built and scaled Creotech’s Quantum Systems division from scratch, co-creating products now used in top global labs developing ion-trap and cold-atom quantum computers. Her scientific background includes a PhD in physics from the University of Warsaw and research experience at CERN, Oxford, DESY and JGU Mainz. She also serves as an expert to the European Commission, co-authored key EU quantum-strategy documents, and is active in European and NATO quantum-industry networks.

In short: Creotech Quantum starts with strong, internationally seasoned leadership.

3. Shareholder Structure

According to the company’s announcement, when the quantum division is spun off into Creotech Quantum, existing shareholders of Creotech Instruments will receive shares in the new entity on a pro rata basis.

Hence, it is reasonable to assume for now that the shareholder base of Creotech Quantum will mirror that of Creotech Instruments (i.e., same proportional ownership, via a 1:1 split of rights).

However, this remains subject to corporate approvals, regulator (Komisja Nadzoru Finansowego) review of a prospectus, and the actual listing of the spin-off.

The shareholder base of Creotech Instruments — and likely Creotech Quantum after the 1:1 spin-off — is exceptionally stable and long-term oriented. The largest investor is the state-owned Agencja Rozwoju Przemysłu (9.5%), followed by major domestic institutions such as TFI PZU (8.5%) and OFE Allianz (8.2%). Several key early backers also remain heavily invested, including Paweł Kasprowicz, Katarzyna Kubrak and Grzegorz Brona (CEO), each holding 7.4%, as well as Grzegorz Kasprowicz (6.7%) and Maciej Wiśniewski (5.0%). In total, the top shareholders collectively control almost two-thirds of the company, giving Creotech a rare combination of ownership continuity, strategic commitment and strong alignment — a structure that should naturally carry over to the newly formed Creotech Quantum.

4. A Moat

The next question is whether the company has a sustainable competitive advantage — in other words, a moat.

In short: yes.

Quantum technologies are not something that can be built overnight or prototyped in a garage. They require deep physics expertise, years of laboratory experience, advanced electronics, stable infrastructure, and access to the global research ecosystem. This creates a natural moat: only a handful of players worldwide are truly capable of developing mature quantum-communication or quantum-computing technologies — and even fewer exist within the European Union. With Europe aggressively pushing for technological sovereignty in quantum communication, the company is positioned directly at the intersection of a fast-growing market and a strategically protected technology stack.

Creotech Quantum enters this space not as a startup, but with nearly a decade of accumulated know-how, proven products used in top global labs, and a 50-person engineering team. The barriers to entry are enormous, and the competitive field is exceptionally narrow — which is precisely why this spin-off is so strategically important.

5. End Market Attractiveness

According to MarketsandMarkets, the Quantum Key Distribution (QKD) market is expected to grow at an enormous CAGR of ~32.6% (take it with a grain of salt, though) between 2024 and 2030, rising from USD 0.48 billion to USD 2.63 billion. This is one of the fastest-growing security-technology segments globally — and Europe is projected to be the fastest-expanding region.

Interestingly, the MarketsandMarkets research does not include Creotech Quantum at all (the report was published before the spin-off was announced). This further supports the view that the Quantum segment remains largely hidden — overshadowed by Creotech Instruments’ primary activity in the space sector.

Coming back to Quantum Key Distribution — it is worth pointing out that QKD addresses a strategic, long-term problem: the coming era of “harvest now, decrypt later,” where sensitive data intercepted today may be broken by quantum computers tomorrow. Demand is driven by governments, defence, finance, telecoms, and operators of critical infrastructure — precisely the domains where long-horizon security matters most.

The competitive landscape in quantum communication — especially in Quantum Key Distribution (QKD) — is remarkably thin. As Anna Kamińska notes in an interview, there are only two truly mature players worldwide with commercially proven QKD products: ID Quantique (IDQ) from Switzerland (recently acquired by IonQ for an estimated hundreds of millions of dollars) and Toshiba, which also develops advanced QKD systems. Beyond these two, the market consists mainly of small university spin-offs and early-stage startups, particularly in Europe. In other words: there are very few capable competitors globally, and even fewer within the European Union, which is precisely why EU governments and institutions are pushing for local, sovereign solutions. This scarcity of mature providers — coupled with high technological barriers — creates a rare strategic opportunity for Creotech Quantum.

6. Financials (early-stage limitations)

Ordinarily, this part of the analysis would dive into the usual fundamentals:

• balance sheet strength,

• capital intensity and future funding needs,

• historical profitability and return on capital,

• management’s capital allocation track record,

• past growth rates,

• and the overall financial resilience of the business.

But in this case, we simply can’t do that yet.

Creotech Quantum is not a stand-alone company today — it is a business segment being carved out of Creotech Instruments, and will only become a separate public entity after the spin-off. Financial statements for the new company do not yet exist, and its standalone cost base, margins, or capital structure are not formally defined.

It also isn’t profitable yet, which is normal at this stage of the quantum-technology lifecycle. Early scaling in deep-tech is capital-intensive and front-loaded.

However, one point is worth highlighting.

As Anna Kamińska emphasized in the interview, the quantum division already generates 8–10 million PLN in annual revenue. This is important for two reasons:

1. This is not an idea-stage startup.

   The company already sells real, globally deployed products used in quantum labs and pilot infrastructures.

2. There is visible commercial traction.

   Years of R&D have already converted into paying customers — something extremely rare among early European quantum-tech firms.

So while we cannot yet apply the full financial toolkit, we can say this:

Creotech Quantum starts its life with existing revenue, existing customers, and mature products — not with PowerPoint slides.

For a deep-tech spin-off, that is a meaningful starting advantage.

7. Valuation (attempted)

Valuation: What Can We Say at This Stage?

Before we even begin, one thing must be clear: we simply do not have enough financial parameters to perform a standard valuation analysis.

Creotech Quantum does not yet exist as a standalone listed company. We do not have:

• separate cost structure,

• standalone margins,

• CAPEX requirements,

• historical profitability,

• or capital-allocation track record.

So what can we reasonably use?

Given the early stage and the available data, the only meaningful metric we can apply for comparison — however limited — is Price-to-Sales (P/S).

It’s not perfect, but in this specific context, it’s perhaps the best we have.

A Note on Peer Comparison: IonQ as the Only Real Option

Another challenge in valuing Creotech Quantum is that there are almost no publicly traded companies operating in the same niche. Quantum Key Distribution (QKD), quantum-control electronics, and quantum-communication infrastructure are still at the very beginning of commercialisation. Most players are either:

• private (ID Quantique until recently),

• tiny university spin-offs,

• or divisions inside much larger conglomerates (e.g., Toshiba), where quantum accounts for a fraction of a percent of revenue.

This means that for now there is only one meaningful listed peer we can use as a reference point: IonQ.

IonQ is not a perfect comparator — it focuses on quantum computing, cloud access, and long-term research bets. But after acquiring ID Quantique, the global leader in commercial QKD systems, it now has direct exposure to the same strategic layer of the quantum stack that Creotech Quantum is targeting: quantum-secure communication and critical-infrastructure protection.

Other public quantum companies (like Rigetti, D-Wave, QUBT) operate in different technological domains and have no mature QKD or quantum-communication offerings. They do not serve as appropriate valuation benchmarks. Toshiba, on the other hand, is indeed active in QKD — but as a multi-billion-dollar conglomerate, it is not a usable pure-play comparison, as quantum segment is just a small fraction of their revenues.

As a result, IonQ becomes the “least bad” — and in practical terms, the only — public proxy for investor sentiment and valuation multiples in this sector.

This is why our relative valuation must rely on Price-to-Sales (P/S) versus IonQ. It’s imperfect for sure, but within today’s quantum-technology landscape, it’s the only realistic yardstick available.

Imperfect Comparison: IonQ

Having the above mentioned limitations in mind, we can still look at IonQ and compare Creotech Quantum metrics against it, since, after all:

• both operate in the core quantum-technology stack, supplying critical infrastructure for quantum systems.

• IonQ recently acquired ID Quantique, the world’s leading QKD (Quantum Key Distribution) company — which directly overlaps with Creotech Quantum’s ambitions in quantum communication.

• Both companies are part of the deep-tech quantum ecosystem, not classical IT, cybersecurity, or semiconductor companies.

So from a sector perspective, they share enough DNA to justify using IonQ as a high-level valuation anchor.

So, let’s look at our most exciting part — the numbers!

The Internal Valuation Anchor: 72.99 PLN per Share

In the official division plan (Plan Podziału, source), Creotech assigns:

• 72.99 PLN per Creotech Quantum share

• At a PLN→USD factor of ~0.27 → ~19.70 USD per share

• Total number of CQ shares: 2,854,347

• Implied equity value: 208.3 million PLN → ~56 million USD

So unless the market disagrees, Creotech Quantum begins life at an implied valuation of ~56 million USD.

For a company already generating 8–10 million PLN in annual revenue (~2.2–2.7 million USD), this translates to:

📌 Implied P/S ≈ 20–25×

This is high in absolute terms — but very modest for the quantum-tech sector.

It is worth noting that the 8–10 million PLN annual revenue estimate is rather conservative. The most recent report report shows that in just the first half of 2025, the Quantum Segment of Creotech Instruments generated over 8 million PLN on its own.

How Does This Compare to a Global Peer, IonQ?

Current third-party data shows IonQ trading at an astonishing:

• ~155× P/S — GuruFocus (gurufocus.com)

• ~148× P/S — StockAnalysis (stockanalysis.com)

• ~153× P/S — YCharts (ycharts.com)

And this all now, when there a major correction is on the way!

In other words:

📌 IonQ trades at ~140–160× P/S.

📌 Creotech Quantum’s implied entry P/S is ~20–25×.

This is 6–7× lower than the quantum-tech benchmark.

Moreover, IonQ’s historical valuation underscores just how extreme investor sentiment can be in the quantum-technology sector. Over the past years, IonQ’s Price-to-Sales (P/S) ratio has ranged from a low of 46.12 to a high of 1,539.2, with a historical mean of 223.46 (source). These numbers illustrate a simple but important point: when the market believes in the long-term potential of quantum technology, valuations can disconnect dramatically from present revenues (or — disconnect from reality). Against that backdrop, the implied P/S of ~20–25× for Creotech Quantum (based on its internal 72.99 PLN/share valuation) appears modest indeed.

Is this a perfect comparison? Absolutely not.

Different scale, different markets, different customers — and IonQ prices in massive future growth.

But given that we currently lack better parameters (EBITDA, FCF, profitability, ROIC, etc.), P/S is the only common yardstick we can use — and under that lens, the spin-off appears:

➡️ conservatively valued,

➡️ early-stage,

➡️ but not overhyped relative to global peers.

What This Doesn’t Mean

This is not a claim that CQ “should” trade at 150× sales (it is a crazy valuation, for any company, if you ask me).

Creotech Quantum valuation will depend on:

• roadmap execution,

• contracts won,

• government adoption of QKD,

• scaling of the product line,

• and competitive dynamics.

But it does mean:

Creotech Quantum is entering the market at a valuation far lower than global quantum players — and with real products and revenue already in hand.

8. Risks

Like any investment, Creotech Quantum comes with its own set of risks. The most significant ones include:

1. Customer Concentration

Creotech’s client base consists primarily of large institutional customers — ESA, CERN, research centres, and government-linked entities. These contracts are high-quality but limited in number, meaning revenue can be lumpy and dependent on winning a few large tenders rather than broad, repeatable commercial sales.

2. Long Sales Cycles

Space, quantum, and scientific infrastructure markets operate on multi-year procurement timelines. Even when the technology is strong, revenues do not scale quickly. This makes planning difficult and limits short-term visibility.

3. High R&D Intensity and Capital Needs

Quantum systems, satellite subsystems, and precision electronics all require continuous R&D investment. Grants help, but eventually equity raises and dilution become likely — especially for the quantum spin-off, which will need funding long before it becomes profitable.

4. Early-Stage Quantum Market Uncertainty

While QKD and control electronics are already in commercial use, the broader quantum computing industry remains experimental. Demand is real but small, fragmented, and rather highly dependent on government or research budgets. Growth projections are easy to overstate.

5. Competition from Global Players

The company competes with well-capitalized international players (e.g., Keysight, Zurich Instruments, Thales Alenia Space). Some markets, particularly quantum control and space electronics, have global leaders with deeper pockets and wider distribution.

6. Execution Risk in the Spin-off

Separating Creotech Quantum into an independent company introduces operational and managerial challenges. The new entity must build its own processes, secure financing, and operate without the full organizational backing of the parent.

7. Regulatory and Geopolitical Exposure

Space and quantum technologies intersect with defense, dual-use regulations, and international export controls. Regulatory changes or geopolitical tensions may affect supply chains, project timelines, and access to components.

8. Limited Financial History

As the quantum business is pre-profit and does not yet have standalone financials, investors lack data on margins, cost structure, capital efficiency, or long-term unit economics. This increases uncertainty and complicates valuation.

9. Future

Creotech Quantum S.A. is now moving into the final stage of becoming an independent, publicly traded company. In September 2025, the company submitted its prospectus to the Komisja Nadzoru Finansowego (KNF) — the Polish Financial Supervision Authority, responsible for approving prospectuses and overseeing public markets. This filing is a key regulatory step toward listing the company on the main market of the Warsaw Stock Exchange.

The quantum division was formally carved out into a separate entity in June 2025, and the planned listing of Creotech Quantum is expected by the second quarter of 2026. The spin-off follows a classic structure:

shareholders of Creotech Instruments will automatically receive shares in Creotech Quantum, proportional to their holdings in the parent company.

In other words, if one wants exposure to Creotech Quantum before the IPO, the only path is through owning CRI shares today.

On the operational side, the company’s roadmap is quite clear. Creotech Quantum is preparing the commercial launch of its QKD system in 2026 — a product already undergoing prototype testing within the EuroQCI network. Additional early revenue streams are expected from ultra-precise time-synchronisation systems (White Rabbit) and quantum-control electronics, with broader ambitions over the next four years as quantum-communication markets mature and satellite-based QKD enters deployment.

Creotech Quantum is positioning itself as one of the few European companies operating across multiple practical layers of the quantum-technology stack — and the spin-off will finally bring this hidden segment of Creotech Instruments into the open market.

Summary

We’re not here to chase hype or jump onto the “quantum is the next big thing” storyline — because the future is too uncertain. Our focus is on what already exists today: technologies that are commercialised, deployed, and generating real revenue.

We’re not interested in fashionable, zero-revenue quantum startups that may never deliver anything tangible. Instead, we’re looking at a capable, engineering-driven deep-tech company with actual products, established revenue streams, and meaningful long-term potential.

We’re also not dealing with the usual extreme price-to-sales multiples that dominate the global quantum-technology space. Here, we’re looking at a company trading at a measured, conservative P/S ratio — especially rare in this sector.

To sum up, we’re not speculating on distant dreams; we’re analysing a company with real technology, real revenue, and real prospects — hidden inside its parent until the upcoming spin-off finally brings it into the open.

That’s it for now, stay tuned!
Michał

Disclaimer

This is not investment advice. I’m not professionally qualified — just sharing my personal analysis.

Introduction

We often talk about returns as if they were simple — numbers on a chart, percentages on a statement. But in a fiat world, those numbers are measured in a system that quietly erodes their meaning. Real wealth isn’t created by nominal gains; it’s created when productive capital delivers lasting value, independent of monetary illusions. This article takes a closer look at what “return” truly represents once you strip away inflation, credit expansion, and accounting conventions — and why every serious investor should keep one eye on real value, not just price action.

On real returns

We talked about achieving high returns from investment. But what does that really mean? A real return exists only when genuine wealth is created — when productive capital yields more goods and services of actual value.

Since in our times “hard” money is gone, most economic calculations — especially those in the capital markets — are conducted in soft, fiat currencies governed by Keynesian principles of regulation and monetary expansion. Company reports, balance sheets, and ratios are all denominated in USD, EUR, GBP, or other such units of account. Consequently, your returns are expressed in nominal terms, while the true loss of purchasing power remains hidden in the background.

That’s why a conservative approach to inflation is essential — better to slightly overestimate it than to be too optimistic. A simple formula keeps things grounded:

real return = nominal return – (conservatively estimated) inflation

I do realize this is a simplification, but I intentionally keep things simple — it’s far more important to be roughly correct than precisely wrong. What one needs to understand is that inflation, like returns, compounds over time. And inflation is the true enemy of money’s value.

This perspective helps us stay anchored in what really matters: the preservation and growth of real wealth and value, not just nominal figures.

But, financial statements and the common metrics used to evaluate stocks do not adjust for inflation directly. Its effects instead appear indirectly, and only to some extent — in interest rates, financial costs, or the weighted average cost of capital (WACC) and other factors.

So when we talk about returns in the stock market, we mean those obtained through stock price appreciation, dividends, and the effects of share buybacks or dilution, all expressed in nominal terms, without automatic correction for inflation or shifts in the cost of capital.

At the end of the day, however, a company’s stock price ultimately follows its earning power. Over time, markets tend to reflect the trajectory of a business’s profits — not perfectly, but closely — with short-term fluctuations driven by changing expectations about the future. Part of these profits may reach shareholders as dividends, a direct, realized return. Another part may be used for buybacks, reducing the number of shares and increasing each remaining investor’s claim on future earnings. Together, price appreciation, dividends, and buybacks form the total return to shareholders — a reflection of how effectively a company transforms its earning capacity into lasting, real-world value.

What we do lastly — quietly, in our own minds — is take the total return and make it a little more real. We look at our compounded return (the growth produced by price appreciation, dividends, and buybacks — essentially, our total-return CAGR) through the lens of average (compounded) inflation over the investment period. We don’t report this anywhere; it doesn’t appear in our personal balance sheet. Yet keeping it in mind gives us a close-to-real sense of the actual wealth created — the kind that reflects genuine purchasing power. It would be better to measure wealth against some form of hard money — gold, or perhaps Bitcoin — but that’s a discussion for another time. Perhaps in the end, all we’re really doing is measuring shadows on the wall — and trying to glimpse the light of real value behind them.

Coming back to Ross Anderson’s Security Engineering, here are a few thoughts on Chapter 2.

I’ll skip the parts about the superpowers of three-letter agencies and state-level opponents, which Anderson covers in detail. Instead, I’d like to focus on something that appears throughout the book: security assumptions.

Anderson rightly notes that “You can’t protect it against all possible threats and still expect it to do useful work at a reasonable cost.” He then asks:

“So what sort of capabilities will the adversaries have, and what motivation? How certain are you of this assessment, and how might it change over the system’s lifetime?”

It’s the last question that deserves special attention. People are often surprised to learn that a system may need to be designed for 20 or 30 years of lifetime—an eternity in IT terms. Yet even older, seemingly obsolete things can have huge, often overlooked, security implications.

Anderson mentions one such case almost in passing, but it’s worth emphasizing:

“Britain has physical access to about a quarter of the Internet’s backbone, as modern cables tend to go where phone cables used to, and they were often laid between the same end stations as nineteenth-century telegraph cables. So one of the UK’s major intelligence assets turns out to be the legacy of the communications infrastructure it built to control its nineteenth-century empire.”

That’s a striking reminder of how deep infrastructure history runs — here, a 19th-century infrastructure shaping 21st-century intelligence capabilities.

It brings to mind the once-viral story (likely exaggerated but too good to ignore) about the “standard of the horse’s ass.”

The Irish Times article recounts how the American railroad gauge — 4′ 8.5″ between tracks — supposedly traces back to the width of two horses’ backsides, inherited from Roman chariot design. The kicker: space-shuttle boosters, constrained by rail tunnels, had to be designed with that ancient dimension in mind. In other words, a two-thousand-year-old standard shaped modern aerospace engineering.

As security engineers, we rarely get to think in such vast timeframes. Still, it’s useful to stay aware that legacy, inertia, and history can all impose constraints — sometimes subtle, sometimes decisive.

And that makes me wonder:

What would be the equivalent of the “horse’s ass” in security?

My notes on «Security Engineering» are not meant to be complete. I focus on extracting the non-obvious — finding the small gems, highlighting what’s particularly interesting, or capturing the essence of a broader idea. I often add my own observations, drawn from intersections between technology, language, philosophy, and other fields of knowledge.

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In keeping with the rigor of a true scholar, Professor Anderson opens his book by defining terms and establishing the conceptual framework for his later analysis.
Sadly, it’s all too common for authors to skip this step, leaving plenty of room for ambiguity. Things get worse when an everyday word is used to describe a complex concept—without definition, people rely on impressions or feelings about what it must mean. The result is confusion—not only among readers but often for the author himself, who is less likely to stay consistent if he hasn’t first defined his terms.

As Professor Anderson aptly notes:
“‘Security’ is a terribly overloaded word, which often means quite incompatible things to different people. To a corporation, it might mean the ability to monitor all employees’ email and web browsing; to the employees, it might mean being able to use email and the web without being monitored.”

It’s almost amusing that even the very word ‘security’—central to our field—can be understood in such contradictory ways. After all, where you stand depends on where you sit.

As another example, Anderson goes on to clarify—or rather, to attempt to clarify—what we mean by a system. He lists six possible definitions (and I’m sure there could be more, especially from an interdisciplinary lens) and notes, beautifully:
“Confusion between the above definitions is a fertile source of errors and vulnerabilities.”

In Cybersecurity and Privacy, Language Leaks Too

What Professor Anderson doesn’t touch on—perhaps naturally, as a native English speaker—is yet another layer of linguistic precision.
The world of CyberSecurity, like IT in general, is dominated by English. While it’s undoubtedly the global lingua franca, English can sometimes be less precise than other languages—Latin, for instance—partly because it lacks grammatical gender.

Consider a simple example: “Yesterday, I was drinking wine with my neighbour”. The precision is gone already (or, as an Englishman might say, privacy preserved 🙂). The French, however, know well the not-so-subtle difference between “Hier, j’ai bu du vin avec mon voisin” and “Hier, j’ai bu du vin avec ma voisine”. Their language, by its very structure, enforces a degree of specificity they may not always welcome—for understandable reasons.
(I used a French example because very few people speak Latin today—a real pity, as learning Latin trains you to express ideas with razor-sharp precision while staying concise).

That being said, losing precision might also have consequences for CyberSecurity —and, worse yet, we may not notice them until it’s too late.

My notes on «Security Engineering» are not meant to be complete. I focus on extracting the non-obvious — finding the small gems, highlighting what’s particularly interesting, or capturing the essence of a broader idea. I often add my own observations, drawn from intersections between technology, language, philosophy, and other fields of knowledge.

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This post originally appeared on LinkedIn. I’m keeping it here as the starting point for my CyberMoat Notes on «Security Engineering».

Amid the flood of cybersecurity books, the late Ross Anderson’s Security Engineering remains a classic — worth returning to, again and again. It’s an incredible resource for anyone serious about understanding how real systems fail and how they can be built to last.

Did you know it’s available online for free, neatly divided into chapters? Super convenient.

🔗 Read Security Engineering online

It’s full of insights — some obvious, some less so (at least to me). I’ll try to share a few of these gems in the coming weeks.

In the 20th century, the most valuable companies laid roads, built railways, and pumped oil.

In the 21st, they build software, manage data, and protect the digital lives of billions.

Cybersecurity is no longer a “nice-to-have.” It’s becoming the backbone of modern infrastructure. Backbone not made of concrete or steel, but of encryption, architecture, and trust.

As a career security consultant and penetration tester with over 15 years in the industry, I’ve seen the shift firsthand. Today, cyber threats impact not just companies, but entire supply chains, governments, and economies. The companies that defend against this chaos are quietly becoming as essential as utilities.

So how do we invest in this?

Not with hype. Not with buzzwords.

But with timeless principles — like value and quality investing, inspired by Buffett, Fisher, and even (too some extent) Graham.

🛡 Cybersecurity = Digital Infrastructure

Without cybersecurity:

• Banks can’t process payments safely

• Hospitals can’t protect patient records

• Cloud providers can’t keep data secure

• AI models can be manipulated

• Critical infrastructure can be shut down

The trust layer of the global economy is built on cybersecurity. It’s not just a sector. It’s infrastructure — made not of concrete, but of encryption, architecture, and vigilance.

💡A Value Framework for the Digital Age

We approach cybersecurity through the lens of quality first, price second.

In an era of weak currencies and abundant credit, the line between “expensive” and “fair” has blurred. A high price today might simply reflect tomorrow’s inflation — not overvaluation, but the quiet erosion of money itself.

That’s why the only reliable anchor of value is quality — businesses with moats strong enough to preserve real productive power over time.

Traditional value investing taught us to buy cheap — or more precisely, well below intrinsic value.

But in the 21st century, valuation has become increasingly complex. We no longer deal in hard assets easily found in book value, but in intangibles such as code, data, network effects, unique skill sets, intellectual property, and — perhaps most elusive of all — trust.

These are the true engines of earning power. The modern moat has shifted from factories and inventory to relationships, reputation, and the capacity to scale intelligence.

Meanwhile, the monetary erosion that surfaced in full after the mid-20th century has only accelerated, distorting the meaning of traditional metrics like price-to-earnings or book-to-value (the latter being basically useless in IT).

In a world where nominal prices rise as currencies weaken, cheapness can be an illusion.

Real value lies in resilient systems — firms that transform intelligence, trust, and capital into durable advantage.

In that sense, Munger’s insight has aged better than most spreadsheets: it’s worth paying up for excellence. When money itself keeps losing substance, a business that compounds real value is the rarest bargain left.

As Naval Ravikant once noted,

“Technology democratizes consumption but consolidates production.”

The digital age rewards quality over quantity. A handful of exceptional producers now generate most of the world’s real value, while capital keeps flowing toward illusion and noise.

In a world of soft money, moats built on competence, trust, and necessity are the hardest assets left.

That’s the essence of our framework:

Buy quality. Hold endurance. Let time build real wealth.

🌍 Undervalued Markets = Hidden Gems

We’ll look for exceptional quality in places most investors ignore:

• Small caps not yet covered by analysts

• Foreign markets where cybersecurity is booming but underreported

• Spin-offs or companies buried inside conglomerates

• Post-hype firms with real cash flows and forgotten brand equity

Our edge is not chasing what’s hot. It’s knowing what’s durable.

🏰 The Moat Matters

Buffett always looked for companies with moats — long-term competitive advantages.

In cybersecurity, a moat might be:

• A data advantage that grows with use

• Deep integration in enterprise workflows (high switching costs)

• A trust-based brand with certifications and compliance built-in

• A rare skill set — cryptography, secure architecture, or large-scale detection — that’s not easily replicated.

We’re not chasing buzzword vendors. We’re interested in real businesses that will still matter a decade from now.

🔭 Why This Matters

In a fiat-driven, credit-extended world, much of what passes for “growth” is leverage and illusion.

But security — in its truest sense — produces real value: resilience, stability, and trust.

It’s perhaps one of the few domains where the product is the absence of chaos.

And that, paradoxically, is priceless.

🧩 What to Expect

CyberMoat isn’t a fund. It’s a thesis — and this newsletter is its laboratory.

Expect:

• Company analyses grounded in fundamentals

• Occasional essays on the philosophy of value and security

• Reflections on markets, technology, and incentives — where systems succeed or fail

• Original thoughts from someone with feet in both the server room and the balance sheet

If you’re interested in:

✅ Cybersecurity as a business model

✅ Investing with discipline, not hype

✅ Finding digital moats before they’re obvious

Then welcome aboard.

We’re here to invest in security — securely.