Key Takeaways
- • StoneX reiterated a Buy rating and $57.00 price target on Galaxy Digital Holdings, according to Investing.com, with analyst Mark Palmer defending the stock despite a sharp selloff.
- • Galaxy Digital shares fell roughly 30% over two weeks and dropped 24.5% in the most recent week, hitting a 52-week low of $16.76.
- • The selloff was driven by creditworthiness concerns about CoreWeave, the sole signed tenant at Galaxy's Helios AI data center campus in West Texas.
- • CoreWeave's unsecured bonds were yielding about 15% and its 5-year credit default swaps traded above 1,100 basis points at the end of the prior week.
- • Galaxy reported a second-quarter GAAP net loss of $85 million and firm-wide adjusted EBITDA of negative $77 million, while completing phase one of Helios.
Summary
StoneX reiterated its Buy rating and $57.00 price target on Galaxy Digital Holdings Ltd. shares, according to Investing.com. StoneX analyst Mark Palmer said Galaxy Digital shares have fallen approximately 30% over a two-week period, with the stock declining 24.5% over the most recent week to its 52-week low of $16.76.
The selloff was driven by concerns about the creditworthiness of CoreWeave, the neocloud company that is Galaxy Digital's first and only signed tenant at Helios, its AI data center campus in West Texas. CoreWeave's unsecured bonds were yielding approximately 15%, and its 5-year credit default swaps were trading above 1,100 basis points at the end of the prior week. Palmer said the market has concluded that a landlord to a stressed neocloud deserves to trade like one, but argued that this conclusion overlooks the reality of Galaxy Digital's situation and the extent to which the economics favor shareholders.
InvestingPro data cited in the article suggests the stock is undervalued at current levels and that the recent selloff may present an opportunity for investors. StoneX maintained its Buy rating on the stock.
In other recent news, Galaxy Digital reported a second-quarter GAAP net loss of $85 million and firm-wide adjusted EBITDA of negative $77 million. The company highlighted completion of phase one of its Helios data center, a significant step in its AI infrastructure strategy. Compass Point raised its price target on Galaxy Digital to $36 while maintaining a Buy rating, citing improving cryptocurrency market conditions and potential high-performance computing deals. H.C. Wainwright reiterated a Buy rating with a $40 price target, even though second-quarter results fell short of expectations amid a challenging period for cryptocurrency prices.
The selloff was driven by concerns about the creditworthiness of CoreWeave, the neocloud company that is Galaxy Digital's first and only signed tenant at Helios, its AI data center campus in West Texas. CoreWeave's unsecured bonds were yielding approximately 15%, and its 5-year credit default swaps were trading above 1,100 basis points at the end of the prior week. Palmer said the market has concluded that a landlord to a stressed neocloud deserves to trade like one, but argued that this conclusion overlooks the reality of Galaxy Digital's situation and the extent to which the economics favor shareholders.
InvestingPro data cited in the article suggests the stock is undervalued at current levels and that the recent selloff may present an opportunity for investors. StoneX maintained its Buy rating on the stock.
In other recent news, Galaxy Digital reported a second-quarter GAAP net loss of $85 million and firm-wide adjusted EBITDA of negative $77 million. The company highlighted completion of phase one of its Helios data center, a significant step in its AI infrastructure strategy. Compass Point raised its price target on Galaxy Digital to $36 while maintaining a Buy rating, citing improving cryptocurrency market conditions and potential high-performance computing deals. H.C. Wainwright reiterated a Buy rating with a $40 price target, even though second-quarter results fell short of expectations amid a challenging period for cryptocurrency prices.
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