H.C. Wainwright reiterates Galaxy Digital stock rating at buy

Galaxy Digital shares sank 13.9% to $18.96 after Q2 2026 results missed expectations amid weak crypto markets. The firm reported a GAAP net loss of $85M ($0.09/share) and adjusted EBITDA of -$77M, while trading desk volumes fell ~7% QoQ. Despite the losses, H.C. Wainwright reiterated a Buy and $40 price target, citing sequential improvement in digital asset adjusted gross profit/EBITDA and progress on Helios data center Phase 1 (on schedule/within budget).

Analysis

GLXY is still trading like a levered crypto liquidity name, while the market is trying to ascribe an AI-infrastructure multiple to a business that has not yet shown the earnings bridge. The key second-order issue is that the trading desk outperformance versus the broader spot market can still coexist with a weaker equity case: it implies share gains on a contracting pool, not a durable competitive moat.

The bigger risk is timeline mismatch. Phase-one build completion is a construction milestone, but the equity will not re-rate until there is visible contracted capacity, financing clarity, and a path to positive free cash flow from the data-center effort. Until then, the AI story can actually worsen the capital intensity profile and keep the stock hostage to crypto beta and dilution risk.

Relative winners are the cleaner, more transparent crypto proxies like COIN if digital-asset activity rebounds; GLXY should lag in weak tape because investors get less operating leverage and more project-execution uncertainty. The contrarian view is that the selloff may have overshot if crypto volumes stabilize next quarter, but that only works if management proves the infra pipeline is monetizable without fresh equity. The missing data is contract backlog, capex funding mix, and whether trading revenues are stabilizing faster than operating expenses.

Key Decisions for Investors

• Short GLXY on rallies over the next 2-6 weeks; use a tight risk budget because the name can squeeze on AI headlines. Target is continuation of multiple compression until there is contracted data-center revenue visibility.
• Pair trade: long COIN / short GLXY for 1-3 months to isolate crypto-market recovery from company-specific execution risk. COIN is the cleaner beneficiary if activity normalizes; GLXY carries more capex and balance-sheet uncertainty.
• If you want convexity, buy 1-3 month GLXY put spreads rather than outright puts; the thesis is a grind lower, but upside gaps can happen on any infrastructure partnership announcement.
• Set an alert on any disclosed anchor tenant, project financing, or equity issuance for Helios. Those are the real falsifiers; absent them, the AI narrative is aspirational, not monetized.