Galaxy Digital’s planned expansion into AI data centers is increasingly being judged through the credit profile of CoreWeave, the cloud computing company that has contracted for the first 800 megawatts of capacity at Galaxy’s Helios campus in West Texas. StoneX maintained its Buy rating and $57 price target for Galaxy, but said the market’s focus has shifted toward the financial strength of Helios’ sole initial tenant.
Galaxy shares had fallen roughly 30% over the previous two weeks before rising 2.5% to $16.57 on Monday following the StoneX note. The gap between that trading price and StoneX’s target reflects how sharply traders have discounted Galaxy’s AI infrastructure plans as CoreWeave’s borrowing costs rise.
CoreWeave had $35.6 billion of debt outstanding at the end of June, according to StoneX analyst Palmer. The company’s funding profile has drawn particular attention because its data-center commitments are long-term and capital-intensive, requiring large investments in power capacity, servers and network infrastructure before cloud revenue is fully collected.
Unsecured CoreWeave bonds were yielding about 15%, while credit-default swaps tied to the company had recently traded above 1,100 basis points, according to the supplied market data. Both measures indicate that lenders are demanding substantial compensation to take CoreWeave credit exposure. For Galaxy, the concern is straightforward: the initial Helios cash flows are linked to one tenant whose financing costs have moved materially higher.
Helios has begun producing revenue
The tenant-risk debate comes as Helios starts moving from a development project into an operating business. Galaxy delivered the first 133 megawatts of critical IT load under its CoreWeave lease in July. Critical IT load refers to the power available for computing equipment, rather than total electricity drawn by cooling systems and other facility infrastructure.
CoreWeave has committed to 526 megawatts of critical IT load across three construction phases under a 15-year lease. The Helios agreement covers the site’s full 800 megawatts of gross power capacity, placing CoreWeave at the center of Galaxy’s near-term AI data-center revenue model.
Galaxy reported its first Helios revenue during the second quarter, though the company also posted an $85 million net loss for the period. Helios generated $20 million in adjusted gross profit and $11 million in adjusted EBITDA, a measure of earnings before interest, taxes, depreciation and amortization that is often used to assess the operating performance of infrastructure assets.
Those early figures give traders a first indication of the economics Galaxy expects from converting former Bitcoin mining infrastructure into AI computing capacity. They do not remove the dependency on CoreWeave, whose ability to maintain its leasing commitments will remain a major variable in how the market values the project.
StoneX said Galaxy expects roughly $80 million of base rent from the development, making the company’s upcoming third-quarter results a closely watched test of whether the contracted revenue is arriving on schedule after the initial delivery of capacity.
AI demand supports the expansion case
Palmer’s more constructive case rests on the scale of CoreWeave’s contracted business and the supply constraints facing the market for high-performance computing. CoreWeave’s contracted backlog nearly quadrupled to $104 billion over the five quarters through June, according to StoneX.
That backlog suggests CoreWeave has secured substantial future demand for GPU-backed computing services, even as the company’s debt burden has expanded. GPUs, or graphics processing units, are the specialized chips widely used to train and run artificial-intelligence models. Limited availability of those processors and the power required to operate them has supported rental rates for AI computing capacity.
StoneX also pointed to firm GPU rental pricing and constrained supply as factors that could support Helios’ long-term economics. Galaxy is seeking to position itself as a provider of power-ready AI infrastructure rather than solely a digital asset firm, giving it exposure to a market where utility interconnection rights, land and operating data-center capacity can be scarce.
The Texas power-grid approval described in the supplied material would raise the cleared energy load across the Helios development to almost 1.6 gigawatts. If fully available for development, that would leave about 830 megawatts of additional capacity beyond the initial 800-megawatt CoreWeave arrangement, allowing Galaxy to pursue other machine-learning and cloud-computing tenants.
McGregor adds a second Texas development option
Galaxy has also acquired land for a second Texas AI data-center campus in McGregor, extending its development pipeline beyond Helios. The company has secured $3.5 billion in new notes to fund the second stage of site construction, according to the supplied material.
Additional capital and permitted power capacity could give Galaxy more flexibility in building AI facilities, but they also deepen the market’s focus on execution and tenant quality. Data-center projects require heavy upfront spending, and lease values depend on a customer’s ability to pay through multi-year contracts.
Galaxy’s digital asset operations remain part of the company’s valuation, but Helios has become the most visible source of both potential growth and credit-related concern. The third-quarter report should offer a clearer read on the pace of rent collection, the expansion timetable and whether Helios can establish a recurring earnings contribution while CoreWeave’s financing costs remain elevated.
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