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Galaxy Digital is poised to benefit from clearer cryptocurrency regulations and demand for artificial intelligence data centers, according to Jefferies. The investment bank initiated coverage of the crypto-linked stock on Tuesday with a buy rating and $35 price target, implying about 20% upside over the next 12 months from Tuesday’s close. Galaxy is a provider of crypto financial services — including trading, asset management, staking, lending and self-custody products — that ventured into bitcoin mining in 2020. That business, similar to other bitcoin miners in recent years, has since pivoted its mining sites into AI data center developments. Specifically, the company’s Helios facility in West Texas serves CoreWeave ‘s AI and high-performance computing operations. Most of Galaxy’s current value and growth potential is tied to those data centers, Jefferies analyst Jonathan Petersen said in a note. “The CRWV lease at Helios was a transformational deal for GLXY, requiring a reconsideration of the value of that site,” the analyst said. “Similarly, the passage of the GENIUS Act provides favorable market structure for GLXY’s Digital Assets business, and re-rates its value.” After President Donald Trump signed the first crypto bill into law last week, a more favorable crypto regulatory environment should allow Galaxy to drive further institutional adoption and demand for its crypto services. “Our $35 price target is based on a sum-of-the-parts (SOTP) analysis, with approximately two-thirds of the value stemming from the data center business,” Petersen said. — CNBC’s Michael Bloom contributed reporting.
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