Galaxy Digital (GLXY) is suitable for capturing the upward trend from the background of favorable regulations for cryptocurrencies, Jefferies said in a new research report.
Jefferies has begun compensation with a purchase rating for Crypto Investment Bank, citing the passage of the US Genius Act, which states that it will “provide a favorable market structure” for Galaxy’s business.
Tuesday’s research also highlights the possibility that Galaxy could benefit from increasing demand for artificial intelligence (AI) data centers. Jeffries called the Galaxy lease at CoreWeave’s 393 MW site in Helios, West Texas a “transformational deal.”
Jefferies assigned the Galaxy a purchase rating and a $35 price target. Glxy shares exceeded 6% at $29.11 on Tuesday. They rose another 3% at $30 in pre-market trading on Wednesday.
The company based on Mike Novogratz is a digital asset financial services company that offers transactions, asset management and investment banking. However, Jeffries believes that about two-thirds of that value comes from the data center business.
Bitcoin
Mining is summarizing AI data, cashing in this sector’s surge, diversifying revenue streams amid the more difficult conditions of BTC mining.
AI data centers and Bitcoin mining facilities have many similarities in terms of hardware and expertise required for high performance computing (HPC), which can prove natural expansion for miners.