Galaxy Digital’s Strategic Pivot: High-Margin AI Infrastructure as the New Growth Engine

The cryptocurrency downturn has left scars across the digital asset ecosystem, but one company is turning adversity into opportunity. Galaxy Digital (BRPHF) is repositioning itself as a leader in AI-driven data center infrastructure, leveraging its Helios campus in West Texas to secure a $4.5 billion revenue stream over 15 years with CoreWeave—a partnership that promises to transform its financial trajectory. This strategic pivot isn’t just about survival; it’s a calculated move to capitalize on the AI boom while insulating earnings from crypto’s volatility.

The CoreWeave Deal: A Foundation for Decade-Long Growth

Galaxy’s partnership with CoreWeave, a Nasdaq-listed provider of GPU-based AI infrastructure, is its most critical asset today. The 15-year lease agreement secures $4.5 billion in total revenue, with an average annual run rate of $300 million for the initial 133 MW Phase I capacity. But this is just the beginning. CoreWeave has already expanded its commitment to 393 MW (adding 260 MW in Phase II), unlocking a $13.5 billion total revenue potential over the full term.

Crucially, the 90%+ EBITDA margins projected for the combined capacity are game-changing. These margins—driven by fixed-rate leases, minimal variable costs, and scale—contrast sharply with Galaxy’s current struggles in its cryptocurrency businesses. While its Treasury & Corporate segment posted a $392 million Q1 operating loss due to digital asset depreciation, the data center segment’s $2.9 million loss is transitional. Revenue from Phase I leasing will begin flowing by mid-2026, with Phase II contributions starting in 2027.

Mitigating Crypto Volatility with Infrastructure Resilience

The write-downs in Galaxy’s digital asset portfolio—down 37% in Q1—highlight the risks of its legacy business. But the Helios deal is designed to de-risk earnings by anchoring them to a recurring, high-margin revenue stream. CoreWeave’s demand for AI/HPC infrastructure is secular: global spending on AI data centers is projected to grow at a 20%+ CAGR, driven by hyperscalers and startups alike.

Galaxy’s 393 MW commitment positions it as a strategic supplier in this ecosystem. Even if crypto prices remain depressed, Helios’s contracts provide a buffer against market swings, with escalators baked into lease terms. This stability is reflected in its balance sheet: cash and net stablecoins rose to $1.1 billion in Q1, while digital asset exposure fell to $908 million—a deliberate shift toward liquidity and infrastructure-heavy assets.

Why BRPHF is a Leveraged Play on AI Adoption

At current valuations, Galaxy’s equity is undervalued relative to its infrastructure potential. The stock trades at a discount to peers like Equinix, despite Helios’s 90% margins and long-term leases. Here’s why investors should act now:

1. Near-Term Catalysts: Phase I deliveries begin in 2026, with revenue recognition kicking in. The $700 million+ first-year run rate (post-Phase II completion) will validate the model.
2. Execution Risk Management: Galaxy has already secured 800 MW of approved power capacity at Helios, with 1.7 GW under review. This scalability reduces dependency on one partner.
3. Valuation Upside: A $13.5 billion revenue stream over 15 years implies a conservative terminal value of $5 billion+ for the data center segment alone—far above current equity valuation.

Risks and Considerations

No investment is without risks. Delays in Phase II construction, regulatory hurdles, or a sudden slowdown in AI demand could dent revenue. However, CoreWeave’s contractual commitments and the 15-year lease structure mitigate these concerns. The partnership’s alignment with hyperscalers like Microsoft and OpenAI further underscores its durability.

Conclusion: Buy the Dip Before the AI Surge

Galaxy Digital’s pivot to AI infrastructure is not just a defensive move—it’s a high-margin growth story in a $500+ billion AI data center market. With BRPHF trading at a valuation that ignores its $4.5B+ revenue pipeline, now is the time to position for the AI era. The near-term pain in its crypto businesses is temporary; the long-term gain from Helios is structural.

Investors should act swiftly: buy BRPHF now. The stock is a leveraged play on the AI adoption wave, and the next 12–18 months will see Galaxy transition from a crypto relic to a data center leader—rewarding early investors handsomely.

This article is for informational purposes only and not a recommendation to buy or sell securities. Always conduct your own research and consult with a financial advisor.