[Long English Thread] Galaxy Digital: Valuation Mismatch at the Intersection of AI and Digital Assets

Chainfeeds Guide:

The current market has mispriced Galaxy, still viewing it as a highly volatile crypto company while overlooking its true crown jewel asset—the Helios data center.

Source:

https://x.com/TTx0x/status/1963295775762334071

Author:

tt

Opinion:

tt: Galaxy Digital (NASDAQ: GLXY) is at the intersection of two major long-term trends: cryptocurrency and artificial intelligence, yet it is severely undervalued by the market. The market still regards it as a highly volatile crypto company, ignoring its true crown jewel asset—the Helios data center. This is a world-class AI infrastructure platform expected to generate stable, high-margin, long-term cash flows. The investment logic for Galaxy lies in the company’s successful transformation from a digital asset service provider to a leading AI infrastructure enterprise. In Q2 2025, Galaxy signed a 15-year anchor lease agreement with AI supercomputing company CoreWeave, covering Helios’s approved 800MW power capacity. This contract is expected to bring the company approximately $720 million in predictable recurring annual revenue, with an EBITDA margin as high as 90%. Compared to other competitors attempting to “transform from bitcoin miners to AI,” Galaxy’s advantages are obvious. It not only holds over $1.8 billion in net cash and investments, but also boasts an experienced management team and a clear expansion path. Helios is expected to expand to 3.5GW in the future, becoming one of the largest data center campuses in the world. The unique advantages of the Helios data center lie in its power, scale, and design. First, the biggest bottleneck in the AI data center industry is power acquisition, and Helios has already secured an 800MW power contract approved by Texas grid operator ERCOT, allowing its tenants to bypass the usual grid access wait time of over 36 months. At the same time, Helios is applying for an additional 1.7GW capacity and, in Q2 2025, will add a 1GW access request through the acquisition of adjacent land, with a total potential of up to 3.5GW. Secondly, its centralized campus in West Texas offers low-cost, stable power supply advantages and is building a long-haul fiber network to Dallas/Fort Worth, achieving low-latency transmission of 10-15 milliseconds. This not only supports AI training but can also accommodate AI inference business, thus ensuring premium pricing capability. Finally, Helios’s phased development model reduces the risk of technological obsolescence, supports cutting-edge GPU cooling solutions such as liquid cooling, and is equipped with a 10-million-gallon water pool to ensure cooling needs. In terms of core partnerships, the 15-year triple-net lease agreement signed between Galaxy and CoreWeave is particularly critical. This agreement means the tenant bears all operating costs, with the 600MW capacity expected to bring in about $720 million in annual revenue, including a 3% annual increase, almost all of which converts to EBITDA. This not only locks in long-term cash flow but also proves to the market that Galaxy has the capability to deliver for hyperscale clients, laying the foundation for attracting more tenants in the future. From a valuation perspective, Helios’s data center business should be benchmarked against publicly traded top data center REITs (such as Digital Realty, Equinix), which are typically valued at 25x EBITDA. In the base case, considering only the approved 800MW, it can achieve about $820 million in present value equity by 2028, equivalent to $24 per share, which is comparable to GLXY’s current share price. In the optimistic scenario, if another 800MW is approved by the end of 2026, totaling 1600MW online, it could bring more than $21 billion in equity value, corresponding to about $10 billion in present value after discounting, or $29 per share. It is worth noting that this valuation does not yet include Galaxy’s profitable crypto asset financial services business. Its traditional digital asset division achieved $71.4 million in gross profit in Q2 2025, with assets under management on its asset management platform growing to nearly $9 billion, maintaining strong cash flow and trading execution capabilities. Compared to the recent successful IPO of peer company Bullish at a $5.4 billion valuation, Galaxy’s traditional business also has independent pricing potential, which could contribute $8-10 per share if valued separately. The main risks include reliance on a single tenant, CoreWeave, as well as project execution and power regulation risks. However, these risks have been mitigated by its robust financial position, phased development strategy, and Texas’s friendly regulatory environment. As the market gradually recognizes the stability and expansion potential of Helios’s cash flow, GLXY’s revaluation potential is significant. [Original text in English]