One Catalyst Could Make Galaxy Blow Up in Two Weeks

You need to always ask yourselves what what's your edge. I mean if you are buying something like you know Apple or Nvidia do you think you have some information edge over everyone else? Probably not right but when you are looking at something like Galaxy there is that information gap. >> What's up everybody? It's LG set here and welcome to Milk Road AI the daily AI show that just found out there's a company out there that pivoted to AI from crypto years ago and didn't even know it at the time. Today is July 17th 2026 recording on the 16th. Is it possible that the market is missing an extremely obvious opportunity in the data center trade? It seems unlikely given that AI bottlenecks have been one of the biggest trades ever. Yet, Martin, our analyst, who covers all sectors, including AI, stocks, and crypto, thinks there's a very obvious company that's going to pump at their next earnings, and that the overall market is seriously lagging on Galaxy Digital. This is Martin's first appearance on the AI pod, and we'll be welcoming him back every week for a deep dive on a company or sector in the market. If you want to see his trades and positions though, including how much Galaxy he actually owns, you can join Milkwood Pro for just a dollar trial at the link below. Today's episode is brought to you by BitGet Stocks 2.0 with real liquidity, real dividends, and securitize the regulated rails for tokenization. All right, Martin, I'm ready to learn about Galaxy. I will admit that I am a bag holder of Galaxy with you, but I don't feel like I understand it nearly as much as you do. Uh, and you are definitely a a Galaxy B at least in the Milk Road streets. So tell me Martin, what is the opportunity with Galaxy right now? Yeah, I think people still see Galaxy just as crypto company and obviously crypto prices are down so sentiment is not really good and so people are not really interested in Galaxy but they are completely ignoring their AI data center business and quite frankly that's not such a big surprise because we haven't seen any numbers on their um ENL statements yet but that's about to change this quarter and that's why I'm super bullish on Galaxy these days because I think after Q2 earnings the stock will be repriced because people will start to pay attention because they are D center in their business is going to start printing money. >> Oh man, when when are Q2 earnings? Before you give me your whole presentation, when are Q2 earnings? That's the date we got to think about. >> I think it's like in two weeks or 3 weeks maybe something like that. >> Okay. Okay. So there's there's a bit of urgency here. Okay, great. Well, I want to learn a little bit more about Galaxy. Um and I feel like you're going to start us off by giving us kind of a snapshot of the company. >> Yes. So um this is my dashboard for um for Galaxy where I track all the numbers that are relevant for for me and my model that I built for Galaxy. And so you know the price is quite down today and I want to see the metrics like what's the market cap, how much depth they have and then you know this is my base case. I think Galaxy should be um valued somewhere around $57 and and yet it's just $24 today. So that's pretty big upside and yeah we we we are going to talk about why I'm so bullish here and you know what are the the bare what are the risks to the thesis and why I'm so bullish and there are actually quite a few catalysts in a in just a few weeks and so I think the the repricing is is inevitable in in pretty short time >> man I like I like talks of repricing in short time man like we said two weeks of the timeline but I think maybe start by telling us too like I want to know maybe you can tell us what Galaxy does like besides being a crypto business or even explain somewhere in there what part of them is a crypto business too. Assume that I've never heard of it. I think that's probably the best way to approach these these episodes and learning about a company like this. >> I think maybe I I'll say one more thing before and it's when you invest and buy buy some stocks what's your you you need to always ask yourselves what what's your edge? I mean if you are buying something like you know Apple or Nvidia do you think you have some information edge over everyone else? Probably not right but when you are looking at something like Galaxy there is that information gap that people are still looking on Galaxy through cryptolands but that's not the story anymore. In fact, in 2022, they bought a bankrupted uh Bitcoin miner and just a month later, um CHPD launched and so it that asset just repriced immediately and from from that day they started to really expand their business into AI data center. And so um now it's not just a crypto business anymore and it's also that AI data center business and people are punishing Kuxi because of their crypto business but I think there is a important nuance to understand that I think their crypto business can be sort of split into two things. One is that their crypto portfolio because they hold you know Bitcoin, Ethereum and then they have also um VC fund. So it's obviously very volatile. That's why you see you know the earnings reports that what one quarter they are printing 500 million in Abida and the next quarter they're making loss. So it's because they have to report the the changes in their portfolio uh mark 2 market even though it's unrealized. So I think it's hitting like every crypto company. It's not just Galaxy. Um and the second part of their crypto business is really about going to institutions and helping them uh with all the blockchain needs or the infrastructure that they might need to have. So if you are Black Rockck, you are about to launch Bitcoin ETF, they are going to Galaxy. Or if they want to lend money or if they want to borrow money, if they want to trade, they are not going to, you know, download Metam Mask and do their trades. They go to Galaxy. I think Galaxy is like maybe Coinbase is still number one player here probably, but Galaxy is is number two and I think their business is doing doing pretty well and in fact um during the last um earnings call their CFO said that this part of their business might be actually profitable and um they are expecting Ebida being positive this quarter around um 90 million which is which is pretty good but we will get into it. Yeah, definitely. I want to know more about that. I want to understand I mean, this is not the crypto side of the of Milk Road. Uh, so we're only gonna spend so much time talking about crypto stuff, but I am curious to know a little bit more about that, how they are competitive as a digital assets business for a lot of these big institutions. But I mainly want to hear about the data center side, uh, Martin, because that's the part that that is going to make them an an AI player and something we've heard a lot about over the last like year. Um, we've had a lot of other uh people talk about Galaxy on the show occasionally, but I feel like we're going to get a real snapshot of of what their competitive edge is here and what their capacity is as a data center company. >> I think last week you had you had Melvin on, right? He was talking about nail clouds >> and that was that was two days ago. >> This week Oh, yeah. Was it? Okay. Yeah. >> Um and he was talking about Nebulus and Corv. But what Corif is doing, they are buying chips and they are managing all these chips. But they need some data center and they need to plug those chips to the electricity. And that's what Galaxy is doing here. They are not trying to be that nail cloud business. They are not buying chips. They just provide okay here is the space. we are connected to the energy and you can bring your own chips and be in no cloud and serve you know um Google or Amazon whatever. So that's their business and the key thing here to understand is that um your advantage is that the the data center is connected to the power because obviously all the computation needs a lot of power and it's not that easy to just you know um go somewhere and build a big data center that's going to consume a lot of energy because there are some negative externalities. So like you don't want to increase prices for like everyone else living there and just and quite frankly the whole the whole grid structure is quite outdated as well. So, it's actually a lot of different things that make it very very hard for a new companies, especially the ones that might have a lot of money. But if you want to start on a, you know, just a new land, it might take, you know, at minimum 3 years just to get approval to connect to the electricity. So, it's not it's not you're not tied to you you could pay, you know, billions of money to the best builders. they are gonna build you your building but unless you have connection to the energy you are [ __ ] and so here what's important for all these AI data centers today is um how much gigawatt or megawatt they have already approved and connected that's that's the key thing here and right now um um Galaxy has 8 800 megawatt approved and contracted and then additional 800 megawatts approved that are not yet contracted but that's one of the catalyst I was talking about earlier they are going to announce next tenant by the end of the summer and so the the first 800 megawatt was contracted it's going to bring them 1 billion in contracted revenue and they will have 90% margins which means that they will keep 900 million out of that as margins for the company and again in next six weeks weeks they're going to announce next tenant and I assume that the terms are going to be even better because there is not enough electricity and so someone is going to pay them a lot of money and again at better terms than corv which is their first tenant >> who's going to be the second tenant >> it's unknown and there are some rumors that it might be James Street um who is a trading firm and maybe it's going to be I don't think it's going to be cor again because you want diversify. Even though I think Corife is is in a great great shape, I I'm not that worried about them um as some people are, but I think they're going to announce someone else. But I also want to raise the point that Galaxy is really good at underwriting the the the uh the contractors or like the the the companies that they are dealing with. So I'm not really worried that they are going to select someone who is not um who might be, you know, risky. Um, so I expect some big name and even though Jane Street might not sound to you like okay this is a big company but it doesn't really matter like if you if they see their books and they are making a [ __ ] ton of money and they think that they are credible and they will be able to you know sustain their business then it might be a good partner. Um, and so again the partner is unknown but it's going to be announced until uh the end of the summer. So it's in six weeks. Can I just go back to what exactly they supply in terms of what's why a Neoclad like Cororeweave has to rent from them or has to contract from them? Like what? So wait, what what exactly? Because because I was under the impression that Cororeweave had their own data centers and their own compute that they were renting out to um companies that actually needed. But Cororeweave is actually renting from Galaxy. Can you kind of explain that to me like where they fit in? Um, Coreweave is primarily a software company who is able to write a software that's efficiently moving the pieces between the rags and chips and they also have access to the Nvidia chips, but they they need to put them under some roof and connect them to the energy and then cool them. So they they use different, you know, um, technologies to cool them off. But the point is they need some building and it they need all those chips connect to the energy. So that's what they are providing here. >> Okay. Okay. Okay. Okay. So that makes a lot of sense. So companies like Coreweave and Nebius that are basically providing that software to kind of connect all that stuff. They still need the actual racks, right? They still need an actual rack. And that's what Galaxy is doing. When did Galaxy start to build this, Martin? Because this is something like you're saying it's like they're they're a crypto company. They have uh digital asset business. They have crypto holdings. But they are clearly way they were clearly ahead of this trend before it became such a huge piece of mind share like such a huge thing now, right? They this you can't build data centers overnight. So they had this one um they've been making this for a while. >> It it was just a huge luck. I think Mike Novagrad who's a CEO, he said that he was just lucky. They bought that you know bankrupted Bitcoin miner and a month later CHGP launched and they were like oh okay so we have got access to the energy but not everyone has that and so that might be valuable and it is volatable as [ __ ] actually and the prices are just increasing. So now you see they they were a good time, a good spot um and now they are just leveraging that and you know once you the the phase one of this Helios um maybe let me talk about the Helios which is their data center and so um Helios is the data center um that's that's the building that they have bought um from that bankrupted Bitcoin miner and the whole um construction is happening in in three phases. is one phase. It's actually the one that is going to show show up on the um income statement this quarter already. And um Galaxy just said that everything was built on time on budget. So that's good. And you know that is going to compound their experience and skills and credibility. So next time they want to do something actually because they just bought a land in Texas and they want to you know leverage that experience that connections and that cash flow so they can build more of of that and >> got it. >> Then they there's going to be a phase two where they are going to add additional 400 megawatt. It means that the buildings are ready. They can connect it to the grid. But they need to to uh build those buildings actually and then you know bring all the people or the connect connections and everything together before they they will uh say hey Corvi it's ready for you. You can come in you can plug in your chips and we are just going to you know send you invoices and you'll just pay us. But it it again it's in phases and phase 2 is expected to to be delivered in Q2 next year and then phase three which is again right now it's rumored that it might actually be accelerated. So you know um here I put that it might be online in Q1 2028 but there are actually some rumors that it might be accelerated and merged with with phase one and delivered by um the end of the year. >> Okay. Okay. This makes a lot of sense. And just to go back to my original question there, who was the who was the Bitcoin mining company that they they bought out that went bankrupt that they scooped up? >> I don't remember the name. >> You don't remember? Okay. Okay. So So >> do you know how much they paid? They paid 65 million for that. >> Yeah, I was going to say it must it must have been pennies at that time because that was like the bare market, right? That was like that everything was collapsing. So, so Novagrat, so Mike Novogat, CEO, founder, he he bought that old that Bitcoin mining company to mine Bitcoin like that's what he did. Like why was he buying it? Because he said it was luck. So why was he originally buying the company in the in the facilities? >> I don't know what was his initial idea. Um so hard to say, but it doesn't matter anymore. Like everyone is like all the Bitcoin miners are pivoting into this, you know, HPC data center business because it just makes sense. >> Oh yeah. economically it's it's much more profitable. >> Do you think he knew and he's just not letting on? Do you think that that's like a sneaky thing? >> No, he he he didn't know. He he admitted that he was just lucky. >> Oh no, he knew. >> But obviously like >> if you buy, you know, when they bought it was still a Bitcoin mining facility. So you need to rebuild everything. And so it's it also costs a lot of money. So um probably one megabyte costs something around 30 million. So you know it it's not just like you are just going to do something very cheap and that's it. You still need to do like the full repurpose of that building so it fits your new business. 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Plus, you get the lowest fees in the market at just 0.04%. And you can trade them like any other crypto. as margin in earn in grid trading tokenized stocks finally done right. Head to milkroad.com/bitgget to get started. Do they have did they have to add power? Because this is actually I didn't realize this is going to be a bit more of a a conversation about just like how how Bitcoin miners have turned into data centers, but do they like do you know much about that retrofitting? Because I would assume they would have to add a lot more power and kind of change a lot of what's in the rack. Um but it's the benefit is that they already had you know the big the big problem right now is finding land to build data centers. So uh naturally they already they had already secured they already had the land and the actual facility so just had to retrofit but did they have to add power? You cannot just add power. You has to ask you know air in Texas to give you that approval. And as I said sometimes it takes three years plus. And right now what Texas made is that because there is a lot of demand they sort of create a program that's called badge zero where they just want to accelerate that process for the existing operators. And so like they see the galaxy is already operating and they are uh you know growing their business and so okay maybe on the next uh session we have we are going to approve additional uh megawatt to the galaxy to the Helios because we we have the relation we know that they are building they already um delivered and built something in Helios that phase one and so you know that's another catalyst that might be coming people always speculate that the next air meeting is about I think two weeks and what if Galaxy will get additional approval of let's say another 400 or 800 megawatt. So because those businesses are not just priced in on the cash flows that they generate today but they are also on how much approved capacity you have and how much contracted capacity you have. And so like obviously the more capacity you have access to the energy you have the better for you because that's not something you can buy in a in a in a year or something. Uh and so that needs to be highlighted. >> Got it. Okay, that makes sense. So they So I guess to recap that like they obviously were lucky to get the facility when they did and not even thinking that it was going to be something they can use for AI. Um just something they were buying cheap from a bankrupt company. But retrofitting that into a proper data center and continuing to build it out is still is still a long process even though they are ahead of it. Uh they're ahead of these multi-year processes, right? Um, what I guess I guess my question Martin then is is your entire thesis for this just to kind of recap where we're at in the episode is that they have an obscene amount of compute or or I guess of of gigawatts or megawws really um available and they are about to announce a partner for like 50% of their capacity and that that and that that revenue and even the the revenue from their current deal with coreweave isn't even on the balance. balance sheet yet. And as a result, that's going to it's going to hit in the next quarterly earnings, which is at the end of this month. And then the market is going to realize that this is also a strong a strong player in the AI AI business and that basically the market has misunderstood it because they just still think of it as a crypto company that and crypto sucks. >> Exactly. Actually, I built a a model. So, let me maybe quickly introduce you. >> Show me. Yeah. >> My model here. Um so Helios that's uh that's their main data center building that they are building right now. phase one and phase two, you know, phase two will be um uh will be online Q2 next year and how these data center companies are valued on the market. When we look at all the peers and you know mergers and acquisitions that are happening, it's based on Aida that this the company is making. And so when we take 25 multiple of Abida that um Galaxy is going to make in 12 months that that translates into 17 billion um in enterprise value but then there is still phase three which I discounted a multiple because you know that might be Q4 2027 or maybe even 2028 we don't know. So I reduced the multiple I just used um 20 multiple here of that EBIT that coming in and it adds 5 billion to the to the market value and then there is a potential for the pipeline and I think as I said this is not a zero value and while it might still not be generating money it's that visibility on the future money coming in. So they as I said they they have still 1.7 um gawatt in a queue that's waiting for air to be approved. Plus they just bought another land Merlin also in Texas. So it's not coming in anytime soon but you know that visibility helps investors like me to okay they are going to grow their business and also because right now it's still waiting in the queue but they are part of that badge zero that might get approved you know any quite soon and then okay I can discount the future cash flows and sort of use that as a value but then it's not just for free so to build the pull all three faces for Helios, it's going to cost them something around 5.5 billion. So you need to deduct that for for the whole value of the company and then they still have a digital assets business. As I said, they provide lending, borrowing, trading and custody for assets and stuff like that. So I I put just a very small number two billion here. Um again it's very volatile because you know institutions might not trade as much during these this bare market and also because they are charging um some um management fees on things like Bitcoin and Ethereum and because the prices are down then they their uh revenues are not that high because it correlates with the prices. But eventually I am I'm quite bullish actually. I think I I shared a um two updates just this week about how they are improving and just shipping in in that part of their business and they still and then they they have a crypto portfolio which is you know as I said they hold Bitcoin they hold Ethereum but they also hold something like Edged I'm not sure if you talked about it I know that Melvin has talked about it it's it's like a Nvidia competitor and they were a seat founder in that race so you that we see fund is also like who cares today because crypto is down. But at some point once these companies go public or they they're going to um be acquired by some bigger ones that might also provide a nice upside here. And then I I need to reduce um the the debt that they have. And just based on all that um I think the the Galaxy um market value should be about $25 billion which which represents the price of Galaxy somewhere around $57 and which is again like 140% from here upside. And I'm quite confident that at some point next year this is going to be reached. Um I'm I'm again it's my biggest position and uh it's getting close to 20% of my portfolio. I don't want to get too much but uh yeah I'm super bullish here. I think the downside is quite limited because we are talking about contracted revenue from a big company and so they still have something that everyone wants today which is a connection to the um to the electricity and access to the energy. So um yeah I'm super bullish here. >> Just a quick note for people listening that the the um updates that Martin is talking about that he posted are in Milkroad Pro. So, one thing that we've added to Milk Road Pro recently is basically um the ability for analysts to just write updates. So, usually we we mainly just had like trades with ration and watch lists and stuff like that. And any questions that people had or updates, we just kind of wrote them in our Discord, but that's very limited. So, um, for people who aren't subscribed yet or people that are Milk Road Pro members and maybe don't know about this in the Milk Road Pro feed, you can basically just go and see like all the updates that these guys are writing and there's a few every day now from across the analyst. And like Martin said in this the past week, he's written two different updates about Galaxy basically giving his thoughts as the price kind of fluctuates and and kind of re reaffirming his his bullish case. And if you want to if you want to ask him questions, you can write comments on that or you can ask them in Discord um or wherever. Um, my question for you, Martin, is is why hasn't the market caught on to this, right? Because this isn't this isn't some kind of secret information. I mean, these are projections that you're coming up with, which is really fantastic, but it's not this isn't some kind of secret, you know, them having another 800 g or megawatts of of um power that they're going to contract soon. That's not a secret, right? So, why why hasn't the market kind of repriced this already? Or is the market just slow like that? Again, when I when I'm looking looking at other AI data center companies and people compare those, Galaxy is never involved. You can see a lot of people being bullish on on this category, but again, they're just missing Galaxy. Galaxy is never part of that discussion. It's it's a crypto business that's struggling right now because prices are down, sentiment is down. But I disagree and I think that's the opportunity right like you are not going to find the edge or the alpha or the upside when you are looking at you know um Nvidia or Apple but this is the opportunity that's like how I love to invest because I think I I did my homework I took the time to understand the company and there are some you know variables to my whole thesis But one thing that's for sure that's the contracted revenue that they are going to get from Kurif and later this year they are going to add you know much more revenue because they are going to announce next tenant and so this is not a speculation this is not you know the company that's going to bankrupt this is contracted revenue that's coming in and even though if corv makes some mistakes and go bankrupt there is going to be a queue of other people who would love to just come in and put their chips and use their data center business. And so if you are not bullish on Galaxy, you are doing something wrong or you haven't done your homework. But right now when the prices are actually down 6% today, I think this is the best opportunity you'll get on the market today. >> I love it, man. What my last question for you is what's the what is the bare case? because you're you're referencing people who uh don't see it the way that you do. Is there what are the risks like with is it possible that they don't hit these earnings that there there is no uh partner or contractor and that there's some or that they get further delayed with their power approvals like what what are the risks to your thesis uh right now? Yeah, obviously the tenant bankruptcy is a risk, but again like they might miss, you know, um let's say one or two quarters of cash flow, but there would be someone else who would love to replace, you know, curve at that point. So I think that's certainly risk and also they just delivered phase one and they are in a process to find funding for phase two and and and so there is still execution risk if they might you know struggle with with the building or finding new constructures or I I that's what scares me a lot here is that I can't really see a burcase because from every angle I'm trying to look at this. The the only thing that could actually be um happening here, but I I put pretty much 0% chance that's the case is that they might go they they might misuse the puns that they have and their crypto business might just create some bad bad debt to the company and they might need to use some of these cash flows to cover their holes. Um but outside of that I think again just put it very simply they have access to the energy and that's the best asset you can have today in the world because there is not just enough energy and electricity connection and access for anyone. show and you you cannot just [ __ ] this out. And in fact, they have a really good relationship with EROT who is you know like um the the officials or like the the institutions who is going to approve or decline their next pending um request. But yeah, I I don't I don't see many risks here to be honest. I would love to see so if if some people um see something that I'm missing here I would love to to build a base case um I just don't see that much risks obviously I would love to see that their crypto business is um also uh operating at profits and so as I showed earlier then that they generated a negative abida um two last two quarters which is not great but you know it was 20 million and the the quarter before 30 million so it's not like a huge thing that should destroy the company and the fact that CFO said that they expect positive Abida at around 100 million this quarter is is pretty positive so and I think at some point crypto will also improve from these levels I'm pretty sure about that and once that happens you know that's going to just adds to their business and the case will be even stronger because that's the tailwind that people are not really pricing that in today. >> Yeah. Yeah. And that could happen soon. And then again, if you want to know more about what the projections are there, if you're just an AI person or stocks person, you don't care about crypto, we do have a crypto podcast, John Gillan, where he interviews a lot of people that are on the institutional side as well, and they can tell you uh how how uh bullish that is or at least how much institutions are coming for crypto uh regardless of prices right now. So that's something where you know even if it's a a Q4 Q1 reversal for crypto bullish then that's that's going to be bullish for Galaxy anyways uh because they'll have the institutional demand and also the portfolio their portfolio will go up and if that coincides with a lot of new revenue on their end uh and a lot of new approvals and that's that's very bullish on the stock. So Martin thank you man. Uh this this has been fantastic. I learned a lot more. I I I really wanted to know about the difference between Galaxy and Core Weeave and just understand that the differences there and I think you really explained it really well. So thank you man. Uh, and I feel like we're going to see you a lot more on this show because uh, you have a lot of great great insight on a lot of different stocks on the AI side and nonAI side. So excited to to see you again, man. >> Yeah, thanks for having me. It was fun. >> Want to stay ahead of the biggest technological [music] shift in history? Subscribe now to get insights straight from the sharpest minds in tech and finance. Quickly, you'll [music] note this show is for educational purposes only. Nothing here is financial advice. Investing always carries risk. Never invest more than you can afford to lose. Thanks for tuning in. See you in the next one.