Galaxy Digital wins new $41.00 target at ATB

ATB Capital Markets analyst Martin Toner raised his target on Galaxy Digital (Galaxy Digital Stock Quote, Chart, News, Analysts, Financials NASDAQ:GLXY) to US$41.00 from US$39.00, citing stronger-than-expected third-quarter results and accelerating demand for AI computing capacity at the company’s Helios data centre campus in Texas.

His revised US$41.00 target combines sum-of-the-parts, earnings multiple and discounted cash flow valuations, including a 20-times multiple for Galaxy’s data centre assets. Toner maintained his “Outperform” rating, highlighting growth in Galaxy’s digital asset business and increasing revenue visibility from its data centre operations.

Galaxy reported Q3 digital asset sales of US$7.97-billion, exceeding consensus estimates by 7%, while trading volumes increased 12% quarter-over-quarter and its loan book expanded 27% to US$1.8-billion. The company reported net income of US$322.8-million and Adjusted EBITDA of US$454.7-million, supported by US$427.5-million in mark-to-market gains across its treasury and venture investment portfolios.

“Management confirmed that excluding a one-time accounting adjustment related to collar loan premium amortization, the Digital Assets segment achieved organic EBITDA profitability in Q3,” Toner said in his Oct. 28 report.

Galaxy reported progress at its Helios data centre campus, where Phase I is fully operational and generated US$79-million in quarterly leasing revenue. Phase II, representing another 260 megawatts of capacity, is expected to begin delivering data halls in Q2 2027.

“Management noted that 7 of the 8 Phase II data halls will be delivered across 2027, with the final hall in 2028, driving an expected annualized leasing revenue run-rate of $800MM–$850MM by the end of 2027,” Toner said.

The Phase II development has a budget of approximately US$4-billion, with construction spending expected to peak during the first half of 2027.

Toner said Galaxy’s access to power is a competitive advantage as demand for AI infrastructure continues to grow. The company has secured approvals for approximately 1,630 megawatts of baseload power at Helios, protecting its current development plans from ongoing regulatory reviews. An additional 2.6 gigawatts of proposed expansion capacity awaits formal allocations from Texas grid operator ERCOT in April 2027.

Galaxy also has a broader development pipeline exceeding 5.7 gigawatts across Texas.

Toner said management’s decision to walk away from a prospective tenant for 830 megawatts of uncontracted capacity at Helios II reflects its preference for stronger counterparties and more favourable long-term economics. Galaxy is seeking agreements with major hyperscale customers rather than accepting less attractive credit arrangements.

Following the results, Toner increased his fiscal 2026 Adjusted EBITDA forecast to US$304.9-million from a previously projected loss of US$82.5-million, on revenue of US$37.24-billion. For fiscal 2027, Toner increased his Adjusted EBITDA forecast by 6.7% to US$466.4-million, supported by higher expected data centre revenue as Phase II begins operations. He also raised his diluted earnings-per-share estimate to US$0.30 from a loss of US$0.85, reflecting stronger quarterly performance and investment portfolio gains.

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