Benchmark maintains Buy on Galaxy Digital, Cdn$41.00 target

Published 28/03/2025, 16:20
Benchmark maintains Buy on Galaxy Digital, Cdn$41.00 target

On Friday, Benchmark analysts maintained a Buy rating and a Cdn$41.00 price target for Galaxy Digital Holdings Ltd (TSX:GLXY:CN) (OTC: BRPHF), a $4.19 billion market cap company currently trading at an attractive P/E ratio of 5.75. According to InvestingPro analysis, the stock appears undervalued at its current price of $12.09. The firm’s analysts highlighted the company’s recent announcement of a 15-year lease agreement with AI hyperscaler CoreWeave. Under the agreement, Galaxy Digital will provide CoreWeave with 133 megawatts (MW) of data center capacity at its Helios campus in West Texas, which will support CoreWeave’s AI and high-performance computing (HPC) activities.

Galaxy Digital expects to generate approximately $4.5 billion in revenue over the term of the agreement. This projection is based on CoreWeave’s commitment to fund the capital investments necessary to upgrade the data centers involved. The company’s strong financial position is reflected in its impressive 61% return on equity and GOOD Financial Health Score from InvestingPro. Notably, the capacity provided to CoreWeave will come from six different sites, rather than a single facility.

The lease agreement represents a significant business development for Galaxy Digital. By securing a long-term contract with CoreWeave, the company is set to bolster its revenue stream and reinforce its position in the digital asset and blockchain technology industry.

The Helios campus in West Texas is poised to become a critical infrastructure asset for Galaxy Digital, enabling the company to capitalize on the growing demand for AI and HPC resources. The deal with CoreWeave underscores the strategic importance of Galaxy Digital’s investment in data center operations.

In conclusion, Galaxy Digital’s fourth-quarter report of 2024, which included the CoreWeave lease agreement details, has affirmed the company’s growth strategy and potential for substantial revenue generation. Despite a YTD decline of 29%, Benchmark’s reiteration of the Buy rating and Cdn$41.00 price target reflects confidence in Galaxy Digital’s business trajectory and its recent operational achievements. For deeper insights into Galaxy Digital’s valuation and growth potential, investors can access the comprehensive Pro Research Report available on InvestingPro, which includes detailed analysis of the company’s financials and future prospects.

In other recent news, BitGo announced its intention to go public through an initial public offering (IPO) as early as the second quarter of 2025. This development follows the company’s Series C funding round in August 2023, where it was valued at $1.75 billion and raised $100 million for acquisitions. The announcement marks a significant step for BitGo, especially after a previously planned acquisition by Galaxy Digital was called off in 2022 due to unmet financial statement requirements. Meanwhile, Galaxy Digital has been in the spotlight with Cantor Fitzgerald assigning an Overweight rating to its stock, highlighting its diversified approach in the digital asset ecosystem. Piper Sandler also maintained an Overweight rating for Galaxy Digital, naming it their top pick for 2025 and projecting a potential 62% upside in stock value. Analysts from Piper Sandler cited potential collaborations and a possible Nasdaq uplisting as key factors for Galaxy Digital’s anticipated growth. These developments underscore the dynamic landscape of the digital asset industry, with both BitGo and Galaxy Digital making strategic moves to enhance their market positions.

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