Rosenblatt reiterates Buy on Galaxy Digital stock, $39 target By Investing.com

Rosenblatt reaffirmed a Buy on Galaxy Digital with a $39 price target, but expects fiscal Q1 2026 results to come in materially below consensus due to weaker trading volumes and lower crypto prices. The note highlights Galaxy’s transition toward an infrastructure-led model, including initial CoreWeave-related revenue and potential HPC upside, while expecting a rebound in the company’s core crypto franchise. CoreWeave-related developments also featured a $6 billion Jane Street deal, a $1 billion equity investment at $109 per share, and a $1 billion senior note offering due 2031 at 9.75%.

Analysis

The market is likely underestimating how quickly GLXY’s multiple can de-couple from its near-term crypto P&L once infrastructure revenue becomes visible. The key second-order effect is that a modestly lower-variance, contracted HPC revenue stream can re-rate the equity more like a hybrid digital infrastructure platform than a directional crypto beta proxy, which matters because the market typically assigns far higher durability to capacity-backed cash flows than to trading income. That said, the transition also creates a reporting air pocket: any Q1 miss can force investors to focus on execution risk before the infrastructure story has enough disclosed backlog to fully offset it.

CRWV remains the cleaner relative-value expression of the AI data-center capex cycle, but the Jane Street financing package adds a subtle warning: high-quality customers are willing to prepay for capacity, yet the associated funding stack is getting expensive. Rising debt costs and equity dilution can compress future upside if growth slows even slightly, making the stock more sensitive to revisions than the headline revenue growth implies. In other words, the market is rewarding scale now, but the durability of returns on incremental capacity still needs to be proven.

The contrarian view is that GLXY’s crypto weakness may be more cyclical than structural, while the infrastructure narrative may be more crowded than it appears. If crypto stabilizes over the next 1-2 quarters, GLXY gets a double tailwind: sentiment recovery plus easier comparisons. Conversely, if AI infrastructure sentiment cools, GLXY may not get full credit for the pivot because investors will treat it as a delayed beneficiary rather than a pure-play winner.

Key Decisions for Investors

• Trade GLXY as a 3-6 month event-driven long only on post-earnings weakness: buy if the stock sells off on a Q1 miss and hold for the first disclosed HPC revenue/capacity commentary; target a re-rating toward infrastructure multiples, but cut quickly if management fails to quantify backlog or power expansion.
• Use CRWV as the cleaner momentum long, but finance it with discipline: stay long only while incremental deal announcements continue to expand backlog; if the stock gaps on financing news or margin concerns, consider taking profits into strength rather than chasing.
• Pair trade: long GLXY / short a basket of higher-beta crypto miners or crypto proxies for the next 1-2 quarters; the thesis is that GLXY’s infrastructure transition should lower earnings volatility relative to pure crypto exposure.
• For event risk, buy short-dated GLXY puts into earnings if implied volatility is cheap versus the likely disappointment risk; the asymmetric setup favors downside protection because consensus reset risk is concentrated in the next print.