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Investing.com -- Jefferies has initiated coverage on Galaxy Digital (TSX:GLXY) with a Buy rating and a $35 price target given a stable, long-term cash flows from its AI data center operations and a more supportive regulatory outlook for digital assets.
Galaxy, founded in 2018, operates across digital asset trading, asset management, and infrastructure.
While initially focused on Bitcoin mining, the company has shifted toward AI data center development, notably through its Helios site.
A key driver is Galaxy’s lease agreements with CoreWeave, totaling 393 megawatts (MW) of capacity at Helios.
Jefferies expects these contracts to generate $900 million in revenue at margins nearing 90%, providing significant cash flow to fund further expansion.
An option for an additional 133 MW remains outstanding, while management has indicated the site could scale up to 1.7 gigawatts of gross power capacity.
Jefferies estimates the current leases account for roughly $13 per share in value, with future capacity potentially worth another $6.90 per share if executed under similar terms.
The firm also points to Galaxy’s digital asset business as well-positioned for growth, helped by recent legislative developments such as the GENIUS Act.
Jefferies values this segment at $10.80 per share, using a valuation multiple that reflects its broad scope compared to more narrowly focused crypto firms.
Roughly two-thirds of Jefferies’ valuation stems from the data center business, with the remainder tied to digital asset management and trading.