Galaxy Digital Highlighted as a Latent Opportunity: Potential in AI and Regulatory Infrastructure

While the market focuses on Galaxy Digital’s recent losses, Benchmark analysts highlight a significantly different outlook when examining the long-term potential. The company, which experienced a $482 million setback in the last quarter, presents an opportunity that investors may be overlooking amid the volatility in the cryptocurrency sector.

With the current stock price around $21, Benchmark maintains an optimistic stance, setting a target of $57 per share. This projection implies a potential appreciation of 170%, reflecting the gap between the current valuation and the true value of Galaxy’s underlying assets.

Helios Data Center: An Undervalued Asset in Texas

The Helios data center in Texas emerges as a key pillar of the investment case. With over 1.6 gigawatts of approved power capacity, this infrastructure asset offers a substantial competitive advantage in the growing demand for computational resources for AI applications. It is expected to generate significant revenue during the year through a lease agreement with CoreWeave, a cloud service provider specializing in AI solutions.

Analysts suggest that the valuation of the Helios center alone could surpass the current market capitalization of the entire company, highlighting the discrepancy between market perception and operational reality.

Crypto Legislation and Expansion of the Lending Business

Galaxy Digital CEO Mike Novogratz expressed a constructive outlook regarding the regulatory environment. In his communication to investors, he indicated there is a 75% to 80% chance that relevant legislation regarding the structure of the cryptocurrency market in the United States will be approved. This potential regulatory clarity could act as a catalyst to attract institutional capital flows into the sector.

With this outlook in mind, Galaxy plans to announce new institutional partnerships and expansion initiatives in the coming periods. Some of these initiatives include developing on-chain credit markets, a segment where the company has already demonstrated traction. Galaxy’s loan portfolio reached $1.8 billion, showing that the financing business continues to grow despite the challenging macroeconomic environment.

Financial Strength for Infrastructure Growth

Galaxy’s cash position reinforces its ability to execute its expansion strategy. With $2.6 billion in combined cash and stablecoin reserves, the company has ample resources to fund both cryptocurrency infrastructure initiatives and AI-related projects.

This financial cushion, combined with the persistent growth of the lending business and the imminent revenue flow from the Helios center, positions Galaxy Digital on a trajectory that analysts consider prominent within the crypto infrastructure landscape. Far from a declining position, operational fundamentals suggest that the market may be significantly undervaluing the company’s true worth.