Jefferies sees Mike Novogratz's Galaxy Digital rallying another 20%

Jefferies initiated coverage of Galaxy Digital (GLXY) with a Buy rating and a $35 price target, projecting approximately 20% upside over the next 12 months. The investment bank cited Galaxy's strategic positioning to capitalize on both increasing demand for AI data centers, with approximately two-thirds of its valuation tied to its Helios facility serving CoreWeave, and a more favorable cryptocurrency regulatory environment following the GENIUS Act, which is expected to drive institutional adoption for its digital asset services. This dual-growth catalyst underpins Jefferies' positive outlook for GLXY.

Analysis

Jefferies has initiated coverage on Galaxy Digital (GLXY) with a buy rating and a $35 price target, signaling potential for approximately 20% upside. The investment case rests on a dual-catalyst thesis that re-frames Galaxy's valuation. The primary value driver, contributing roughly two-thirds of the valuation in a sum-of-the-parts (SOTP) analysis, is the company's pivot into artificial intelligence data centers. The lease of its Helios facility to CoreWeave for high-performance computing is highlighted as a "transformational deal." The second catalyst is the improving regulatory landscape for cryptocurrencies, specifically the recent passage of the GENIUS Act. Jefferies anticipates this will foster greater institutional adoption and demand for Galaxy's suite of digital asset services, including trading and asset management, potentially leading to a value re-rating for that business segment. This positions GLXY as a hybrid play, benefiting from both the tangible, high-growth AI infrastructure trend and a recovery in the regulated digital assets space.

Key Decisions for Investors

• Investors seeking exposure to both AI infrastructure and the digital asset sector may find Galaxy Digital a compelling investment, given Jefferies' view of its dual-growth drivers.
• Closely monitor any news or performance metrics related to the Helios data center and the CoreWeave lease, as this single asset is the primary component of Jefferies' valuation thesis, representing two-thirds of the projected value.
• Track further developments in cryptocurrency regulation following the GENIUS Act, as the successful expansion of institutional adoption for Galaxy's financial services is a key secondary catalyst for realizing the full price target.
• Consider the SOTP valuation; the stock's performance is heavily tied to the market's perception of its data center assets, potentially offering a more tangible valuation floor compared to pure-play crypto firms.