Galaxy Digital Stock Falls After Earnings Miss. Why One Analyst Thinks Shares Should Be Higher.

The company reported weaker-than-expected earnings and revenue in the second quarter. (Nasdaq MarketSite)

Shares of Galaxy Digital were falling sharply Tuesday after the crypto-investment and data-center company reported weaker-than-expected quarterly earnings and revenue.

The company posted earnings per share of 8 cents for the second quarter, short of Wall Street’s consensus call for 18 cents, according to FactSet. Revenue totaled $9.1 billion, well below analysts’ estimate of $13.9 billion.

Galaxy stock was sinking 10% to $25.91 on Tuesday.

Trading volume declined across the crypto industry in the spring, which contributed to the lackluster quarter. Galaxy’s digital-asset trading volumes declined 22% from the first quarter, primarily due to reduced spot-trading activity. And digital-asset sales—by far Galaxy’s greatest revenue source—dropped to $8.6 billion in the second quarter from $12.8 billion in the first quarter, and $8.8 billion a year ago.

The earnings print contained some positive non-crypto news for investors, though.

CoreWeave has now committed to using all the electrical power approved at Galaxy’s Helios data-center campus in West Texas, where construction is progressing on schedule, the company announced. Galaxy agreed to acquire an additional 160 acres of land and a 1 gigawatt load interconnection request adjacent to the campus.

Helios will be a “top five data center in the world if we get that fully built out,” said CEO Mike Novogratz on a conference call. “I couldn’t be more bullish.”

The company expects to begin generating revenue from its data-center business in the first half of 2026.

“We think shares should trade higher this morning given the CoreWeave news and expanded Helios potential capacity,” wrote Piper Sandler analyst Patrick Moley in a research note Tuesday.

Piper Sandler rates Galaxy stock at Overweight with a $36 price target.

Write to Nate Wolf at nate.wolf@barrons.com