TheBlock
Galaxy Digital (GLXY) shares have dropped about 30% in two weeks on fears over the financial health of CoreWeave, the neocloud provider that is the sole tenant contracted for the first 800 megawatts of capacity at Galaxy's Helios AI data center campus in West Texas. StoneX pushed back on Monday, reiterating its Buy rating and $57 price target and arguing the market now effectively assigns no value to Galaxy's digital asset operations.
Why it matters
CoreWeave carried $35.6 billion in debt at the end of June, and its rising borrowing costs have spooked investors because Helios's contracted cash flows rest on that single counterparty. "The concerns about GLXY stem from the fact that the contracted cash flows for the first 800 MW at its Helios data center complex rest on a single counterparty whose cost of capital has jumped," StoneX analyst Mark Palmer wrote.
But Palmer argues the market is overstating the risk. CoreWeave's contracted backlog nearly quadrupled to $104 billion in the five quarters through June, GPU rental rates remain firm, and demand for computing power keeps outstripping supply. Even with falling AI token prices, rising usage is driving increased spending on AI compute.
Market impact
Galaxy delivered the first 133 MW of critical IT load in July under a 15-year lease, with CoreWeave committed to 526 MW across three phases. Helios generated its first revenue in Q2: $20 million in adjusted gross profit and $11 million in adjusted EBITDA, against an $85 million net loss for the company. Galaxy has also bought land in McGregor, Texas, for a second AI data center campus. GLXY shares traded up 2.5% to $16.57 on Monday.
Frequently asked questions
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Why did Galaxy Digital shares fall 30% in two weeks?
Investors are worried about CoreWeave's financial health, since the neocloud provider is the sole tenant contracted for the first 800 MW of capacity at Galaxy's Helios AI data center in West Texas. CoreWeave carried $35.6 billion in debt at the end of June.
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What is StoneX's rating and price target for Galaxy Digital?
StoneX reiterated its Buy rating with a $57 price target, arguing that Galaxy's current valuation undervalues its AI data center business and assigns effectively no value to its digital asset operations.
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How big is CoreWeave's contracted backlog?
CoreWeave's contracted backlog nearly quadrupled to $104 billion in the five quarters through June, which StoneX analyst Mark Palmer cited as evidence the market may be overstating the risk to Helios's cash flows.
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How much capacity has Galaxy delivered at Helios so far?
Galaxy delivered the first 133 MW of critical IT load in July under a 15-year lease. CoreWeave is committed to 526 MW of critical IT load across three phases, within Helios's full 800 MW of gross power.
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Did Galaxy's Helios data center generate revenue in Q2?
Yes. Helios generated its first revenue with $20 million in adjusted gross profit and $11 million in adjusted EBITDA, though Galaxy reported an overall net loss of $85 million for the quarter.
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