Galaxy Digital's $85M Loss Is the Wrong Story - $10.4 Billion in AI Data Center Contracts Is Not

To investors,

Galaxy Digital's stock dipped about 7% in pre-market trading Tuesday after the company reported a $85 million net loss for the second quarter. The earnings per share miss was 80% worse than the consensus estimate. The narrative wrote itself before the market opened: another crypto company bleeding money.

The data tells a different story.

Here are the numbers the headline skips.

The $85 million loss in Q2 is a 61% improvement from the $216 million loss in Q1. That follows a $482 million loss in Q4 2025. Galaxy's adjusted gross profit came in at $43 million. Adjusted EBITDA - earnings before interest, taxes, depreciation, and amortization, a rough proxy for cash earnings before long-term capital spending - improved from ($188) million in Q1 to ($77) million in Q2. The stock still trades near $22 with $2.7 billion in total equity and $2.5 billion in cash and stablecoins. The company generated $8.71 billion in quarterly revenue.

The losses are driven almost entirely by the depreciation of digital asset prices during the quarter - a mark-to-market hit, not an operating failure. Bitcoin was trading around $63,500 as of early Tuesday, roughly 45% below its price a year ago. Galaxy holds about $1.16 billion in net digital assets and investments, down 15% from the prior quarter as crypto prices fell.

That accounting mechanic is real. But it's also the wrong lens for understanding what Galaxy is becoming.

The AI Power Play Nobody Is Paying Attention To

Galaxy's Helios data center campus in West Texas delivered its first phase of power to CoreWeave - one of the largest GPU cloud providers riding the AI infrastructure wave - earlier this year. The Phase I delivery includes 200 megawatts of gross power, with 133 megawatts of critical IT load, under a 15-year lease. Rent commencement is scaling with delivered capacity.

That's operational reality, not guidance.

Phase II is already funded. Galaxy completed a $3.5 billion private offering of senior secured notes due 2031 to build it. CoreWeave has contracted the entire Phase II critical IT load - 260 megawatts - under the same 15-year base lease with two five-year extension options. The minimum contracted lease payments over the initial term total $10.4 billion. Galaxy's own model projects $472 million in rent and $424 million in net operating income by 2028, at a 90% operating margin. This is a near triple-net lease, meaning CoreWeave covers utilities, taxes, insurance, maintenance, and repairs.

Galaxy acquired the original Helios site from Argo Blockchain in late 2022 for about $65 million. The company has now transformed it into the anchor of a multi-gigawatt data center pipeline.

Subsequent to quarter-end, Galaxy tripled down. The company acquired three additional sites in Texas, bringing the total power pipeline to over 5.7 gigawatts:

• Merlin: 500 acres in McGregor Industrial Park, 74 megawatts initial capacity, potential to expand to 500 megawatts.
• Caspian: approximately 700 megawatts of potential power capacity.
• Selene: approximately 900 megawatts of potential power capacity.

As of March 31, Galaxy already reported 1.6 gigawatts of approved data center capacity. The company is now targeting over 5.7 gigawatts in total.

This is not a crypto company that dabbled in real estate. This is an infrastructure company building the physical layer that the AI buildout cannot function without.

The Abundance-Scarcity Engine

Here's the framework.

AI is creating an abundance of intelligence. Models get smarter, faster, and more accessible every quarter. When intelligence becomes abundant, something becomes scarce.

Power. Data centers. Physical capacity to run the machines that produce AI output.

Galaxy is sitting on one of the largest data center power pipelines in North America, with contracts locked in for $10.4 billion over 15 years to a single tenant that can't easily be replaced. The 90% net operating income margin on that lease means almost every dollar of rent flows to the bottom line. At near triple-net terms, Galaxy bears almost none of the operating risk.

The scarcity premium on physical AI infrastructure is compounding. Companies that control land, power allocations, and interconnection agreements are capturing value that software and model companies cannot replicate. You can spin up another AI model in six months. You cannot spin up 500 megawatts of contracted, permitted, and interconnected data center capacity in the same timeframe.

The Counterargument

Galaxy is still losing money. The EPS miss was 80% worse than expected. The stock dropped. These are not imaginary concerns.

The loss trajectory is narrowing fast. The operating business - trading, asset management, and infrastructure - generated positive adjusted gross profit. The net loss comes from digital asset mark-to-market depreciation, which reverses when crypto prices recover. Bitcoin at $63,500 is down sharply from last year's highs, but the company's $2.5 billion in cash and stablecoins provides a buffer that most crypto-linked businesses don't have.

More importantly, the mark-to-market hits from the crypto business are becoming a smaller fraction of the total as the data center revenue base scales. A company with $10.4 billion in contracted data center leases over 15 years does not need crypto to appreciate to succeed. It needs power approvals and construction timelines to hold.

The strongest bear case is that Galaxy is overleveraged and overextended. The $3.5 billion in senior secured notes due 2031 is real debt. The 5.7 gigawatt pipeline is still subject to ERCOT interconnection processes and regulatory approvals. Not every megawatt of planned capacity becomes a megawatt of leased capacity.

Those are legitimate risks. But they are execution risks, not thesis risks. The contracts exist. The land is acquired. Phase I is already delivering power.

What the Market Is Missing

The market is pricing Galaxy as a crypto company that happens to own data centers. The data supports a different classification: an AI infrastructure company that still carries crypto-era balance sheet exposure.

The BNY partnership announced last week - a multi-year agreement with the custodian overseeing more than $60 trillion in assets to advance digital asset infrastructure and staking - reinforces the bridge between traditional finance and the digital economy. That's not a crypto-native deal. That's institutional-grade infrastructure.

The three new Texas acquisitions post-quarter suggest Galaxy is still in acquisition mode, not retrenchment.

If the data center pipeline reaches even a fraction of its planned 5.7 gigawatts and the contracted lease revenue holds, the $85 million quarterly loss becomes a footnote in the earnings history of a company that built one of the largest private AI power networks in North America.

The best investors don't fall in love with the headline number. They fall in love with the trajectory.

Galaxy's trajectory is a line moving sharply toward profitability, anchored by a data center moat that doesn't depend on crypto prices. Bitcoin's next move will still matter. It just won't matter as much as the $10.4 billion in contracted rent that's already in the ground.

The abundance of AI intelligence is creating a scarcity of physical infrastructure. Galaxy is building the bottleneck.