Summary Galaxy Digital is aggressively transitioning from digital assets to a diversified financial and AI infrastructure platform, offering significant upside potential. GLXY's integrated model—spanning global markets, asset management, and AI-driven data centers—supports robust revenue growth and operational efficiency. The Helios data center provides a unique moat, positioning GLXY for decades of expansion and premium AI infrastructure multiples. Issue a buy rating with a $40 price target, citing strong EPS momentum, valuation disconnect, and credible diversification, while acknowledging execution and regulatory risks. Investment Thesis Galaxy Digital ( GLXY ) offers an interesting opportunity as it works to transition from digital assets into a more diversified financial and data center operation. I feel very bullish on the company moving forward, given the firm 's efforts at developing diversified pillars for its operations. Combining the company 's blockchain-enabled investment bank with industrial-scale AI infrastructure gives it a stable base of revenue along with substantial upside as its AI efforts mature. This potential, combined with the stock 's current discounted trading value, suggests that this could be a strong play for investors that are looking for an AI infrastructure stock with solid growth potential. Galaxy 's Core Overview While I see it as easy for the market to focus excessively on Galaxy 's role in Bitcoin and the price of Bitcoin, I believe that its true strength is in its three-pronged operation. The company is a player in global markets, asset management, and digital infrastructure. Furthermore, I do not see these segments as operating in their own silos; rather, they form a symbiotic ecosystem. For example, the infrastructure arm provides the hardware for the financial segment. This strategy seems to be working, as the asset management sector has grown to $9 billion in total assets, which is also complemented by its substantial staking assets. These sizable assets serve as a critical base, as they effectively subsidize the research and development costs of the company 's more capital-intensive infrastructure projects. Furthermore, the global markets portion of the business continues to provide institutional-grade liquidity and lending. This capability acts as a strong entry point for large-scale capital allocators into the business. By controlling the entire vertical, Galaxy captures value at every point; this level of integration is a strength that its peers simply struggle to match. One of the key reasons that I am so bullish on the company is its long-term equity. The physical scale and potential earnings of its Helios site are substantial. This isn't just a server room; it's an industrial fortress that takes up over 1,500 acres. Owning the land and underlying power rights is a substantial moat in the AI age; while other firms struggle to find the rack space for GPUs, Galaxy has a facility that could allow for decades of horizontal expansion. The company has also secured renewable energy for its facility, which is another masterstroke as it guarantees low-cost power for the massive facility. Galaxy 's Moves Beyond Bitcoin I see the market as fundamentally mispricing Galaxy Digital by tethering its valuation to the volatile swings of Bitcoin; this oversight fails to account for the company 's aggressive transformation into a high-tier AI infrastructure provider. In addition to being a developing AI data center provider, it is also a premier blockchain-enabled investment bank . By rebranding from a crypto miner to an AI developer, management is successfully positioning GLXY to capture the premium multiples that are normally for high-growth technology firms. A key element of this is the crown jewel that is its Helios data center, which, when fully developed, could reach a value of $30 billion. Considering it has a current market cap of $9.61 billion , it shows the market is valuing the massive AI infrastructure as superior to its core crypto business. A key element of my bullish outlook for the company is its positioning to act as a bridge for traditional finance that is entering the on-chain economy; the recent collaboration with State Street ( STT ) to launch SWEEP, a tokenized private equity fund , serves as a proof of concept for this ambitious plan. I see this partnership as a massive win for the company 's credibility because it secures GLXY 's position as the infrastructure provider for trillion-dollar asset managers; this has the potential to turn digital asset volatility into steady recurring fee revenue. Comparing Galaxy to Its Major Peers The contrast between Galaxy and its peers represents a fundamental divergence in both its trajectory and strategy. For example, Galaxy has a top-tier ranking, which is a powerful endorsement of the firm 's multi-engine model. This stands in direct contrast to companies like Affiliated Managers Group ( AMG ) and StepStone Group ( STEP ), which are locked into the low growth of traditional capital markets. In this regard, I see Galaxy as operating in a different dimension, as its forward revenue growth of 366.74% is dwarfing the sector median of 7.33%. This adds to the argument that the company should be treated as a high-velocity technology platform rather than a legacy financial institution. GLXY Revenue Growth (William Davis) Another key aspect of my bullish outlook for the company is the seemingly glaring valuation gap that it has; the stock currently trades at a forward price/sales multiple of only 0.07x . This is a massive discount compared to the sector median, despite its rivals often having more bloated cost structures. For instance, SEI Investments ( SEIC ) carries a workforce of over 5,000 to manage its operations, whereas Galaxy has just north of 500. This lean organizational structure is a strength for Galaxy, as it is contributing to its elite efficiency; it allows the firm to generate strong revenues without the legacy overhead that acts as a cap for its major competitors. GLXY Valuation Gap (William Davis) Valuing Galaxy 's Future Stock Price I believe that there is a significant disconnect between Galaxy 's current valuation and its potential as it continues its pivot. One example of this is the market 's failure to capture the firm 's recent massive operational beat. While the consensus forward EPS is $0.57 , this figure appears increasingly weak when compared to the third quarter's actual performance of $1.01 per share. The fact that Galaxy beat its EPS estimates by such a large amount suggests that its earnings power of the core business is much stronger than the estimates are suggesting. EPS momentum (William Davis) Using a forward P/E approach allows me to estimate a potential target for the price moving forward. There are some challenges with this approach, as the Helio data center will need to be treated somewhat as a hidden asset that has a value that is not fully clear at the moment. When evaluating the company, it is reasonable to assume that it will largely maintain its 43.43x forward multiple. Multiplying this by the consensus EPS of $0.93 provides us with a projected value of $40.39. This shows that there is substantial upside to the stock and results in me issuing a buy rating. Risks to the Bullish Outlook for GLXY Infrastructure Execution Risks While Galaxy 's transformation into an AI data center provider is a major driver of its valuation rerating, it does introduce a significant layer of risk that its previous business model did not face. A very pressing one is the execution risks between the heavy CapEx phase and the anticipated cash flow. Unfortunately, a project of this scale will have the risk of potential delays that could slow the build-out. Any significant construction derailment or cost overruns could force the company to seek out additional funding and erode its terminal equity. Capital Structure Complexity Another issue that investors should be mindful of is the potential for shareholder dilution due to its aggressive capital-raising activities. In particular, the company undertook a $1.15 billion private offering of 0.50% exchangeable senior notes at $55.76 per share. This move has the potential to greatly expand the share count. While this approach to raising capital can provide a low-cost option for raising investment money, it can act as a drag on the immediate upside for equity holders. Power and Regulatory Volatility While Galaxy is undertaking an aggressive pivot to infrastructure, it still remains fundamentally tethered to the crypto market. The current political and regulatory environment is viewed as pro-crypto, and any shift in this sentiment could have major impacts on its large projects, such as the SWEEP tokenization initiatives. Another potential issue for the company is the volatility of the Texas ERCOT power grid; localized energy pricing can lead to extreme spikes in costs as a result of extreme weather. This could have a major impact on the company 's power-intensive AI workloads. While the company is attempting to use renewable energy sources to offset this risk, it still has the potential to dramatically alter the operating cost of the facility. Conclusion Given Galaxy Digital 's aggressive moves at diversification, I see it as rapidly becoming more than just a Bitcoin stock; it is a sophisticated infrastructure and financial services platform that seems to be mispriced by the market. While the potential execution risks must be acknowledged with its Helios build-out and macro-regulatory changes, the firm 's demonstrated history of efficiency and revenue growth provides a fair margin of safety. Even accounting for a disciplined forward P/E valuation and a conservative estimate of its infrastructure value, a price target of around $40 still seems like a reasonable target. As a result, I am confident in issuing a buy rating for the stock given this potentially substantial upside.
