StoneX says Galaxy's AI data center business is undervalued as CoreWeave debt worries weigh on shares

Galaxy shares fall as questions mount over its only data center tenant

Galaxy Digital shares have dropped about 30% in two weeks as investors worry about CoreWeave, the cloud computing provider that rents the first 800 megawatts of capacity at Galaxy's Helios AI data center campus in West Texas. CoreWeave is the only tenant contracted for that capacity.

In a client note on Monday, research firm StoneX repeated its Buy rating and $57 price target on Galaxy. It argued that the market is undervaluing Galaxy's AI data center business and assigning no value at all to its digital asset operations. The worries center on CoreWeave's rising cost of borrowing and $35.6 billion in debt outstanding at the end of June.

Key numbers behind the debate

• Galaxy Digital shares fell about 30% in two weeks, then traded up 2.5% to $16.57 on Monday.
• CoreWeave owes $35.6 billion in debt, as of the end of June.
• CoreWeave's contracted backlog grew nearly fourfold to $104 billion over the five quarters through June.
• Galaxy delivered the first 133 MW of critical IT load — the computing power capacity actually handed to a tenant — in July under a 15-year lease.
• Galaxy posted an $85 million net loss in the second quarter, while Helios recorded $20 million in adjusted gross profit and $11 million in adjusted EBITDA.

What the StoneX note argues

Analyst Mark Palmer wrote that the concern comes from the fact that the contracted cash flows for the first 800 MW at Helios depend on a single counterparty whose cost of capital has jumped. Still, he said investors should weigh Galaxy's options for expanding Helios and the broader outlook for AI computing demand.

Palmer pointed to CoreWeave's contracted backlog, firm GPU rental rates and demand for computing power that keeps outstripping GPU supply as reasons the market may be overstating the risks. He also wrote that, despite falling AI token prices, rising usage is driving higher spending on AI compute. A GPU, or graphics processing unit, is the chip commonly used to run AI models.

These are the analyst's arguments, not confirmed outcomes.

What the record shows about Helios and Galaxy

CoreWeave has committed to 526 MW of critical IT load across three phases, while Helios has contracted the full 800 MW of gross power. Helios began generating revenue in the second quarter. Galaxy has also bought land in McGregor, Texas, for a second AI data center campus.

Galaxy reported an $85 million net loss for the second quarter even as Helios produced its first revenue.

Why CoreWeave's debt matters for Galaxy

Because CoreWeave is the sole tenant for the first 800 MW at Helios, Galaxy's income from that capacity rests on one company's ability to keep paying. CoreWeave's $35.6 billion in debt and higher borrowing costs are the reason investors are asking that question. The size of CoreWeave's $104 billion contracted backlog is the main counterargument StoneX offers.

Sources

• The Block