Galaxy Digital Plummets 6.78% Amid AI Pivot Uncertainty: What’s Brewing in the Data Center Sector?

Summary
• Galaxy Digital (GLXY) trades at $25.70, down 6.78% from $27.57
• Intraday range: $25.70 (low) to $27.11 (high)
• Turnover surges to 3.24M shares, 1.72% of float
• Sector leader Equinix (EQIX) rallies 2.13% as data center demand intensifies

Galaxy Digital’s sharp selloff has ignited speculation about its AI-driven data center ambitions and regulatory hurdles. With the stock trading near its 52-week low of $17.40, investors are scrutinizing the firm’s $1.15B notes offering and mixed analyst ratings. The broader data center sector remains polarized, as companies like Equinix gain traction while GLXY faces turbulence.

AI Pivot and Regulatory Scrutiny Spark Turbulence
Galaxy Digital’s 6.78% decline stems from a confluence of factors: its $1.15B exchangeable notes offering, which raised concerns about debt burden, and ongoing regulatory uncertainty in the crypto sector. Recent news highlighted CEO Mike Novogratz’s Solana bullishness, yet the stock’s collapse suggests investor skepticism about its AI pivot. The Helios data center project, while ambitious, faces execution risks as the company balances crypto and AI infrastructure. Analysts at Weiss Ratings reiterated a 'Hold (C-)' rating, underscoring doubts about profitability in a competitive market.

Data Center Sector Mixed as Galaxy Digital Struggles
The data center sector remains fragmented, with Equinix (EQIX) surging 2.13% on strong cloud demand and AI infrastructure growth. Galaxy Digital’s struggles contrast with peers like CyrusOne and Digital Realty, which benefit from stable enterprise contracts. GLXY’s focus on AI-driven projects like Helios introduces execution risk, while competitors leverage established colocation models. The sector’s $2.5B 2030 market forecast highlights long-term potential, but GLXY’s regulatory and operational challenges create near-term headwinds.

Options Playbook: High-Leverage Puts for Short-Term Volatility
• RSI: 51.27 (neutral)
• MACD: -1.97 (bearish), Signal: -2.41, Histogram: 0.43 (downtrend)
• Bollinger Bands: Upper $32.34, Middle $27.05, Lower $21.77 (oversold near $25.70)
• 30D Support: $25.48–$25.82

GLXY’s technicals suggest a short-term bearish bias, with key support at $25.48. The 2025-12-12 options expiry offers two high-conviction plays:

1. GLXY20251212P25 (Put):
• Strike: $25, Expiry: 12/12
• IV: 83.78% (elevated), Delta: -0.36 (moderate sensitivity), Theta: -0.023 (slow decay), Gamma: 0.117 (responsive to price swings), Turnover: $230K
• Payoff (5% downside to $24.42): $0.58/share. This put offers leverage (30.47%) and liquidity, ideal for capitalizing on a breakdown below $25.48.

2. GLXY20251212P26 (Put):
• Strike: $26, Expiry: 12/12
• IV: 93.51% (high), Delta: -0.48 (strong directional bias), Theta: -0.018 (low decay), Gamma: 0.111 (high sensitivity), Turnover: $22.5K
• Payoff (5% downside to $24.42): $1.58/share. This contract’s high IV and delta make it a top pick for aggressive short-term bearish bets.

Action: Aggressive bears should prioritize GLXY20251212P25 for liquidity and GLXY20251212P26 for directional exposure. Watch for a close below $25.48 to validate the bear case.

Backtest Galaxy Digital Stock Performance
I attempted to automatically identify every date from 2022-01-01 to today on which Galaxy Digital Holdings (GLXY) suffered at least a –7 % drop, but the event-date generation step returned an internal error. To move forward, we have two practical options:1. Retry the event-date extraction with a slightly different method (e.g., re-running the filter while explicitly suppressing warnings). 2. Use the daily close-to-close percentage-change series we already downloaded, manually flag every trading day with a ≤ –7 % move, and run the post-event back-test on that list.Either path gives us a clean set of “plunge” dates that we can feed into the event-backtest engine to see GLXY’s average performance, optimal holding window, and risk/return profile after those shocks.Please let me know which route you’d prefer (or if you have another threshold or definition in mind), and I’ll proceed accordingly.

Galaxy Digital at Crossroads: Watch $25.48 Support and AI Bet
Galaxy Digital’s 6.78% drop reflects investor jitters over its AI pivot and regulatory risks. While the sector leader Equinix (EQIX) gains 2.13%, GLXY’s execution risks and debt load remain critical hurdles. Key levels to monitor: $25.48 (30D support) and $27.05 (Bollinger Middle Band). A breakdown below $25.48 could trigger further selling, while a rebound above $27.11 might attract AI bulls. Act now: Short-term bears should target GLXY20251212P25/26 options, while long-term investors should wait for a clearer regulatory and AI infrastructure roadmap.