Analyst Sees AI Deal as Catalyst
Galaxy Digital’s 15-year AI hosting deal with CoreWeave can be a turning point for the company, says H.C. Wainwright & Co. analyst Mike Colonnese. Announced during Galaxy’s Q4 2024 earnings conference call, the deal involves converting 200 MW of Galaxy’s Helios mining facility in Texas to host 133 MW of AI infrastructure.
The agreement is to produce $4.5 billion in revenue over the contract’s lifespan—roughly $300 million annually. That would be 70% of Galaxy’s 2024 revenue, with terms the analyst characterized as “very favorable,” yielding $2.26 million per MW in annual revenue at roughly 90% EBITDA margins.
Helios Expansion Offers Billions in Future Value
Even at estimated retrofit expenses of $1.46 billion to $1.73 billion, project debt will pay for most of them. CoreWeave will also cover electricity and operational expenses, reducing Galaxy’s long-term costs.
Colonnese noted that Galaxy has 600 MW of unused capacity at Helios, which offers much space for growth. He estimates the data center segment potentially worth more than $3.5 billion one day—value not yet factored into Galaxy’s current stock price.
Q4 Results Beat Expectations
Galaxy released strong Q4 2024 numbers with $698.1 million of revenue—a 388% increase from Q3 and above consensus and analysts’ expectations. Net income was $174.3 million (52 cents per share) and also exceeded expectations.
The quarter included a $560.6 million realized gain on digital assets and a $166.3 million special charge for a settlement with the New York Attorney General in relation to LUNA-related claims.
Even as he lowered his target price to C$30 from C$35, Colonnese maintained a Buy rating, citing Galaxy’s positioning and huge potential upside in the AI infrastructure space.
