Galaxy Digital’s Bold Pivot to AI Data Centers Garners Strong Buy from Rittenhouse Research
Rittenhouse Research, an emerging firm specializing in fintech, AI, and crypto sectors, has awarded Galaxy Digital (GLXY) a robust buy rating, emphasizing its strategic evolution from bitcoin mining toward AI-driven data center operations.
When Mike Novogratz, Galaxy Digital’s CEO, acquired the Helios data center from Argos in late 2022, it seemed like a bailout of a struggling bitcoin miner amid the post-FTX crypto slump. However, the rapid mainstream adoption of AI technologies, particularly large language models like ChatGPT, unexpectedly transformed Helios into a valuable asset aligned with the surging AI market demand.
According to Rittenhouse analysts, Galaxy’s transition away from the volatile and capital-intensive bitcoin mining business toward AI infrastructure represents a smarter, more sustainable growth path. Unlike bitcoin mining—where revenue declines roughly 50% every four years due to halving events—AI data centers generate stable, high-margin cash flows through long-term leases with major cloud providers.
Galaxy’s Helios facility exemplifies this trend, securing consistent revenue without the costly equipment upgrades miners face. While other miners like Riot Platforms and Cipher Mining have only recently begun considering diversification, Galaxy’s move was timely and strategic.
The analysts highlight Galaxy’s strong financial footing, including $1.8 billion in net cash and investments, and its partnership with CoreWeave, whose long-term contracts provide significant revenue stability. Though some investors worry about CoreWeave’s credit, Rittenhouse views these concerns as exaggerated due to its well-structured financing and institutional backing.
Crucially, Galaxy has fully exited bitcoin mining, sending a clear message to potential hyperscale clients about its AI-focused future. Cipher Mining’s CEO recently admitted the challenge miners face convincing major AI customers, but Galaxy’s unique positioning sidesteps these issues.
If Rittenhouse’s outlook proves accurate, Galaxy Digital’s AI data center pivot could mark one of the most impactful moves in crypto infrastructure this year.
