A new report from fintech and cryptocurrency research firm Rittenhouse Research cited Galaxy Digital’s move from Bitcoin mining to artificial intelligence (AI) infrastructure as the primary reason for assigning the company a “strong buy” rating.
While Galaxy Digital was once a prominent player in the Bitcoin (BTC) mining market, its 2022 acquisition of the Helios data center from troubled miner Argo Blockchain could suddenly give the company the appearance of being a major player in the rapidly growing AI sector.
At the time of the purchase, the move was seen as a lifeline for the struggling crypto miner. However, the rapid rise of high-performance AI platforms like ChatGPT has created a boom in demand for efficient data centers, and Galaxy appears to have one of the most valuable assets in this space.
“Galaxy stumbled upon Helios by accident,” Rittenhouse said in a recent investment note. The company estimates that the data center, which is now focused on serving AI clients, could generate $1.7 billion in EBITDA and $32 billion in market cap in the near future.
While the crypto industry remains volatile due to periodic Bitcoin mining outages and constant hardware upgrades, AI data centers tend to provide stable and highly profitable returns through triple-net leases with major cloud computing players.
Rittenhouse argues that this difference in business models gives Galaxy a strategic advantage by eliminating mining entirely.
“Galaxy has completely shut down its Bitcoin mining operations to focus solely on its dedicated AI data centers, sending a positive signal to potential hyperscale tenants,” the analysts note.
Rittenhouse’s report contrasts Galaxy’s strategy with the approaches of other crypto miners such as Riot Platforms and Cipher Mining, which have tried to establish themselves as providers of diversified data infrastructure.
However, the report argues that these companies did not have clear AI goals before the field began to boom.
*This is not investment advice.
Source: cryptonews.net
Your email address will not be published. Required fields are marked *
[…] January 2022, the number of cryptocurrencies existing in the market increased by 1 thousand. This implies that each new…
Your writing is like a breath of fresh air in the often stale world of online content. Your unique perspective…
I would like to share my story and express my great gratitude to Maria. My husband Alexander was literally taken…