A brand new report by fintech and crypto analysis agency Rittenhouse Analysis cited Galaxy Digital’s transition from Bitcoin mining to synthetic intelligence (AI) infrastructure as the highest purpose for its “robust purchase” ranking on the corporate’s inventory.
Galaxy Digital’s AI Pivot, Not Bitcoin Mining, Is Its Greatest Bull Case, Rittenhouse Analysis Says
Whereas Galaxy Digital was as soon as a significant participant in Bitcoin (BTC) mining, its 2022 acquisition of the Helios knowledge middle from troubled miner Argo Blockchain could have unexpectedly positioned the corporate as a significant infrastructure supplier within the burgeoning AI economic system.
On the time of the acquisition, the transfer was seen as a lifeline for a struggling crypto miner. However the fast rise of productive AI platforms like ChatGPT has turned the demand for high-performance knowledge facilities right into a gold rush, and Galaxy seems to be sitting on one of the beneficial property within the house.
“Galaxy stumbled upon Helios by probability,” Rittenhouse wrote in a latest funding be aware. The agency believes the info middle, now devoted to serving AI prospects, may generate $1.7 billion in EBITDA and $32 billion in fairness worth within the close to time period.
Whereas the crypto business stays unstable as a consequence of BTC mining being topic to periodic outages and fixed tools upgrades, AI knowledge facilities usually provide secure, high-margin returns via triple-net leases with large-scale cloud computing prospects.
Rittenhouse argues that this distinction in enterprise fashions makes it a strategic benefit for Galaxy to exit mining completely.
“Galaxy has fully exited all Bitcoin mining actions to focus solely on its AI knowledge middle targets, sending a constructive sign to potential hyperscaler tenants,” the analysts wrote.
Rittenhouse’s report compares Galaxy’s strategy to that of different crypto miners like Riot Platforms and Cipher Mining, which have tried to reframe themselves as diversified knowledge infrastructure suppliers.
However the report argues that, in actuality, these corporations had no concrete AI targets till the AI growth started.
*This isn’t funding recommendation.
