Galaxy Digital selloff misses bigger catalysts in AI, regulatory shift as Benchmark still sees 170% upside

Galaxy Digital’s sharp post-earnings selloff may be missing larger catalysts tied to U.S. crypto regulation and the company’s push into AI data centers, according to a new note from Benchmark analysts.

Galaxy shares (NASDAQ: GLXY) fell after the firm reported a $482 million fourth-quarter loss amid weaker crypto prices and declining trading activity. However, Benchmark analyst Mark Palmer argued investors are focusing too heavily on near-term volatility rather than longer-term drivers that could reshape the company’s earnings profile.

The firm reiterated its "buy" rating and $57 price target, implying roughly 170% upside from recent trading levels near $21, according to The Block price data, saying Galaxy remains positioned to benefit from both a recovery in crypto markets and expanding institutional adoption.

A key potential catalyst is progress on U.S. crypto market structure legislation. During the earnings call, CEO Mike Novogratz said he sees a 75% to 80% chance such legislation passes within weeks, a move analysts say could unlock broader institutional participation in digital assets.

Galaxy has spent years building trading, lending, and asset management infrastructure aimed at institutional clients, positioning it to benefit if regulatory clarity draws new capital into the space. Novogratz also said the company expects to announce additional institutional partnerships and infrastructure initiatives in the coming quarters, including expansion in onchain credit markets.

Benchmark also highlighted Galaxy’s Helios data center campus in Texas as an underappreciated asset. The site now has more than 1.6 gigawatts of approved power capacity, with additional approvals pending, and is expected to begin generating revenue this year through a lease with AI cloud provider CoreWeave.

Given the valuation multiples applied to AI-focused data center operators, analysts argue Helios alone could support valuations above Galaxy’s current market capitalization, even before accounting for the company’s core crypto businesses.

While fourth-quarter results swung sharply from Galaxy’s record third quarter, analysts said losses were largely driven by crypto price declines rather than operational weakness. The company’s lending unit, meanwhile, continued to grow, with its loan book reaching $1.8 billion despite softer markets.

With $2.6 billion in cash and stablecoins on hand following recent capital raises, Benchmark said Galaxy remains well funded to pursue both crypto infrastructure and AI expansion even as markets remain volatile.