Summary Galaxy Digital is mischaracterized as merely a crypto proxy, but recent innovations challenge this view. GLXY has launched institutional OTC prediction markets, targeting hedge funds and family offices with unique liquidity and discretion. I see significant growth prospects and an attractive valuation, supporting a bullish stance on GLXY. GLXY’s differentiated offerings position it ahead of retail-focused competitors like Polymarket and Kalshi. The bears just keep placing bets that Galaxy Digital ( GLXY ) is simply a proxy for the broader cryptocurrency market. Meanwhile, developments such as Galaxy's launch of its own OTC prediction markets prove that this company continues to explore new and highly innovative investment opportunities. After reviewing what the company has been up to over the last several months and taking a look at its current valuation as well as its growth prospects, I believe the bears are dead wrong about this stock, and I want to make that case now. Galaxy Digital Launches an OTC Market for Institutional Players Galaxy.com There is a good chance that you have heard of the prediction market platforms known as Polymarket and Kalshi. These platforms allow everyday people to make predictions on real-world events in the hopes of earning a profit. They tend to specialize in markets related to live sporting events and a limited number of financial markets. However, what Galaxy Digital is offering is far more expansive. In a press release about this matter, the company stated the following: Galaxy today announced the launch of institutional OTC prediction markets trading through its Global Markets trading desk. With this offering, Galaxy can now enable hedge funds, family offices, and other institutional clients to access prediction market liquidity at sizes and with a level of discretion not available through retail interfaces. The big difference here between what Galaxy is offering and what already exists out there is that Galaxy's offering centers more on allowing hedge funds and other institutional investors to get their money down with a certain level of discretion and liquidity. The existing markets like Polymarket and Kalshi don't offer enough liquidity for those who want to place significant amounts of money on a prediction, but Galaxy is building a marketplace where they can. I see this as significant because it opens the door to more revenue for Galaxy. These institutional traders are not currently offered enough opportunities, and many are looking for a place to trade. As the creator of a market where this type of activity can take place, Galaxy stands to profit from every trade that takes place on its new platform. Galaxy Digital Obtains BitLicense in New York The fact that Galaxy has received a BitLicense in New York is a bigger deal than it may at first seem. New York is an area that you absolutely want to operate in if you are a crypto company, and it is a necessity to obtain one if you are to operate in the Empire State. There are still plenty of hedge funds, institutional traders, private equity firms, and more that any crypto company will surely want to have access to in New York State. The fact that Galaxy has gone out and obtained the license that it requires to do so is a positive sign in my book. Helios Delivers Its First AI Data Center Capacity After Much Speculation Galaxy.com For several years, speculation has swirled that Galaxy might try to convert at least some of its Bitcoin mining capacity at its Helios campus into an area that could be used for AI infrastructure and high-performance computing. Many viewed this as idle talk about a potential strategic opportunity. However, that narrative is finally beginning to shift as Galaxy delivered its first data center tranche to CoreWeave ( CRWV ). CoreWeave is one of the fastest-growing AI infrastructure companies in the world. The fact that Galaxy is now actively delivering products to them via the Helios campus is a highly bullish step in the right direction, in my opinion. Before this announcement, investors had to make a lot of assumptions about what the project could be. They had to assume that demand for AI infrastructure would remain strong, that major partners would be willing to sign long-term deals, and that the Helios facility could deliver on schedule, among other things. Since the announcement, investors don't have to question whether Galaxy can get involved in the AI infrastructure business. Instead, the only debate left now is just how large that business will become. Sure, there is still an element of speculation in there, but I like the direction that Galaxy is moving in here. Currently, AI infrastructure is a very hot industry to get into , and I like that Galaxy is getting as deeply involved in it as it already is. CEO Mike Novogratz Offers More Optimism About Helios' Leasing Timeline If you happened to be following Galaxy's stock in early June, you would have seen it spike up around June 8th: It has since cooled off somewhat, but that big surge came immediately after CEO Mike Novogratz gave an update about Helios' leasing timeline. As TheStreet.com reported, he said: Speaking on the June 6 episode of "All Things Markets with Anthony Scaramucci & Michael Novogratz," Novogratz said Galaxy is building what will be "the largest single campus data center in America," at 1.6 gigawatts. Half of that capacity is already leased, and he expects the full 1.6 gigawatts to be spoken for by the end of summer. Investors were seemingly very excited by this news, and I believe that they have every right to be. I see it as proof of serious demand for what Galaxy has to offer from its Helios facility. The fact that management expects the facility to be fully leased out in this manner by July 4th tells me that it has received plenty of attention from customers. Share Repurchasing Tells Me That Management Sees an Undervalued Stock One of the signs of an undervalued stock, in my book, is when management begins to aggressively buy back shares. They are tasked with making such moves when they are most prudent for shareholders, and I believe that the fact that Galaxy management has authorized such large buybacks at this stage could be a bullish signal. Management stated the following during the Q1 2026 earnings report : During Q1, we repurchased 3.2 million shares of our Class A common stock for $65 million under our previously announced $200 million share repurchase authorization. This amount more than offset dilution from equity-based compensation awarded in 2025 and brought our quarter end share count to approximately 390 million basic shares outstanding. They went on to say that they view share buybacks as an alternative way to use capital during periods when they see a meaningful disconnect between the share price and the true value of the company. They also stated that they only do so in a disciplined manner and that they intended to maintain that discipline going forward. To me, this is yet another sign that the stock is undervalued. Management's Guidance Outlook Management did not offer much in the way of hard numerical guidance for Q2 2026, but it did provide some insights into what it expects in the months ahead. CEO Mike Novogratz did note that preliminary Q2 indications were strong by stating: So far in Q2 we have seen an improvement in digital asset prices and overall activity. This has translated into a strong start to the quarter for Galaxy, with second-quarter-to-date Adjusted EBITDA estimated at approximately $90 million through last Friday. This is a major improvement from the negative EBITDA figures that the company had posted in Q1. I believe that this means that Galaxy's earnings could significantly improve over a short period of time, despite the damage sustained across the Bitcoin market recently. Management has also indicated that AI infrastructure is anticipated to become a much larger revenue contributor beginning in Q2. This is looking more and more like a transitional quarter in which AI infrastructure moves from a project with promise to something that truly adds returns to the bottom line. While precise numerical guidance would be more concrete, I still like what management has to offer here. They are putting forward a vision of where the company is headed that seems highly positive and likely profitable to me. What Does Galaxy's Valuation Look Like Right Now? Galaxy Digital does not currently produce positive earnings, so many otherwise useful valuation metrics don't carry the weight that they otherwise would. However, I don't think that alone should scare anyone away from viewing this as a worthwhile investment. The fact is that there are some other valuation metrics that can be used as a point of comparison. Add to that the fact that some of the favorable growth metrics that Galaxy boasts of, and there are plenty of reasons to view this stock favorably. I believe that it is also useful to compare Galaxy's valuation metrics against those of other companies that operate within the same or a similar space. A few examples that I selected for comparative purposes are the following: Core Scientific ( CORZ ) Hut 8 Corp ( HUT ) Digital Realty ( DLR ) Equinix ( EQIX ) Applied Digital ( APLD ) These companies serve as a useful benchmark against which to compare Galaxy's valuation because they operate in the same niches. Let's take a look at how they stack up on various measures. Price-to-Sales Remember, Galaxy does not yet have positive earnings. Therefore, there is no meaningful way to measure it on something like its price-to-earnings or P/E ratio. Instead, I have decided to compare these various companies based on the price-to-sales or P/S ratio. Here is the comparative chart for these companies on that measurement: On this measurement, Galaxy looks incredibly affordable. The ratio is well below 1x in a field where 10x or more is common. This simply goes to show that Galaxy is generating significant sales even if it is not yet converting those sales into positive earnings. I believe that the day will come when those sales do translate to meaningful earnings, and those who jump on board with this stock early enough may be rewarded for it. EV/Sales Given Galaxy's strong sales figures, perhaps it comes as no surprise that the company's enterprise value compared against its sales is also a strong metric for the company. Here is the EV/Sales ratio for each of the companies that I have listed above: Once again, Galaxy stands out as far cheaper than its competitors on this measure. I believe that this is largely due to the fact that the company generates such significant sales this early in its existence. When you compare the value of its enterprise against the total quantity of its sales, that ratio is quite small. Still, Galaxy has an enterprise value that is just short of $10 billion at this stage. Therefore, you can't reasonably sweep that under the rug. Just keep in mind how significant its sales numbers have to be to produce the ratio above with an enterprise value that large. Revenue Quantities I have touched on the sheer amount of revenue that Galaxy generates in a given year, but it can also be helpful to see what that looks like plotted out on a chart. When you show the raw figures against those of its nearest competition, you can begin to see just how stark those differences are: The way that I see it, there is no shortage of revenue for Galaxy to eventually convert into profit. The only question, in my mind, is when they want to turn that faucet on. I believe that these figures are strong enough to justify the share price, even though the company does not currently generate positive returns. The significant projects that the company is working on, as outlined above, make the stock valuable to me even if it does not yet have positive EPS. Risks to the Bullish Thesis While I believe that there is a strong case to be made for the value of Galaxy Digital at these levels, there are some who will point to risks to that picture. Among the risks that are often cited for this stock are the following: 1) The AI Data Center Strategy Introduces Capital Expenditure Risks It is not cheap to get involved in the AI infrastructure space. There is a lot of capital expense that goes into the front end of building these projects, and there are plenty of companies lining up to take those jobs. Galaxy has put itself in line for some of this work as well, but investors should remember that there are significant costs tied to such projects. Plus, there isn't crystal-clear certainty that Galaxy will execute as effectively as it needs to in order to make the most of these projects. As such, numerous questions are left unanswered at this stage. 2) The Business Can Be Challenging to Value The reality is that the business can be extremely challenging to value, thanks to swings in the value of the digital assets that the company holds. From quarter to quarter, the company may produce unrealized gains or losses based on the volatility of Bitcoin and other assets. If investors can place a valuation tag on a stock, then it becomes challenging to know if they are looking at a good bargain or not. 3) Regulatory Concerns Remain a Constant Worry The regulatory state of cryptocurrencies remains uncertain both in the United States and throughout the world. For a stock that relies on cryptocurrency prices as heavily as it does, Galaxy investors must concern themselves with the fact that the profitability of the company could hinge significantly on the level of regulation of cryptocurrencies in any given country. Why I Still Rate Galaxy Digital as a Buy In my mind, Galaxy is a stock worth owning because the company has so effectively adapted to a changing market. I believe that management has seen some of the risks associated with being overly reliant on cryptocurrencies, and it has decided to get involved in other fields. The rapid shift into the AI infrastructure niche, as well as the move to offer an OTC prediction market for institutional traders, appeals to me a lot. I think that this provides evidence of competent management at the helm of the company. As it stands right now, I recommend Galaxy Digital as a buy for any portfolio at these price levels.
