Galaxy Digital: Strong Buy Rating Positioned for AI Infrastructure Growth
In a recent analysis, Benchmark reaffirmed its bullish stance on Galaxy Digital (Nasdaq: GLXY), maintaining a Buy rating with a target price of $57. This optimism is rooted in the recently approved expansion capacity at the firm’s Helios data center in Texas, which Benchmark believes adds a significant layer of upside potential that the market has yet to fully appreciate. As the demand for AI infrastructure surges, the approved capacity is set to enhance Galaxy’s competitive positioning in a rapidly evolving landscape.
Helios Expansion: More Than Just Power
The Texas grid operator, ERCOT, has granted Galaxy approval for an exciting additional 830 megawatts of power capacity at Helios, which elevates its total approved capacity to approximately 1.6 gigawatts. This makes Helios one of the largest single-site AI data center campuses in the U.S. According to Benchmark analyst Mark Palmer, the market has not fully absorbed the broader implications of this expansion. While the initial 800 megawatts is contracted, this new capacity remains uncontracted, giving Galaxy considerable flexibility to adapt to future AI computing demands and tenant needs.
The Upside of Optionality
Benchmark presented an important perspective, suggesting that this newly approved capacity should be viewed as optionality rather than an immediate revenue driver. The flexibility associated with this additional power enables Galaxy to respond dynamically to changing market conditions, pricing, and infrastructure requirements. Such strategic positioning empowers the company to leverage AI-driven computing demands as they arise, potentially leading to significant long-term benefits.
Diversified Valuation and Growth Opportunities
The valuation of Galaxy Digital employs a sum-of-the-parts analysis, attributing around $21 per share solely to the already-contracted Helios capacity, which accounts for nearly 70% of its current stock price. Beyond this, the firm also benefits from its digital asset trading, lending, staking, and asset management operations. Benchmark’s analysis underscores that even without accounting for the newly approved Helios capacity, Galaxy’s existing business portfolio provides enough justification for a positive upward trajectory in its stock price.
Regulatory Propulsion and Market Opportunities
Galaxy Digital stands poised to benefit significantly from anticipated regulatory catalysts in the U.S. crypto landscape. The firm’s focus on institutional clients and its diversified operational model are assets, particularly as discussions around crypto market structure legislation progress. Such regulatory advancements would presumably create a more favorable environment for Galaxy’s business endeavors and market expansion.
Expanding Horizons in Tokenized Markets
In conjunction with its growth in data center capabilities, Galaxy has been actively expanding its venture footprint in tokenized markets. Recently, Galaxy Ventures led a $7 million seed round for Tenbin Labs, a company developing tokenized gold and FX products based on futures pricing. This investment not only broadens Galaxy’s involvement in real-world asset infrastructures but also positions it favorably within commodities and non-dollar foreign exchange markets, thereby enhancing its overall growth prospects.
Conclusion: Strong Buy Potential
Trading around $31.75, shares of GLXY have surged nearly 30% from previous lows, signaling an upward momentum that aligns with Benchmark’s projected target of $57—an impressive upside of roughly 80%. With fourth-quarter and full-year results expected to be released soon, investor attention remains focused on Galaxy Digital as it embarks on a promising trajectory in AI and beyond. As the demand for AI infrastructure continues to escalate, Galaxy’s innovative strategies and robust capacity expansion could lead to substantial long-term gains for its investors.
By strategically navigating an evolving industry landscape, Galaxy Digital demonstrates its commitment to leveraging opportunities through its advanced data center capabilities and diversified business model, ensuring its place at the forefront of the AI infrastructure revolution.
