GLXY Stock Rises After Goldman Price Target Hike, CEO Mike Novogratz Flags Bitcoin ‘Decoupling’

• Goldman Sachs said that Galaxy Digital’s Q1 earnings beat was driven primarily by lower losses in non-operating segments, including treasury and corporate activities. 
• It added that the strength was partially offset by softer performance in digital assets and data centers, which typically command higher valuations.
• However, CEO Mike Novogratz said in the first-quarter earnings call the business has “decoupled” from Bitcoin for the first time ever.

Shares of Galaxy Digital (GLXY) gained in early morning trade on Wednesday after Goldman Sachs raised its price target on the stock following its first-quarter earnings beat. 

Goldman Sachs raised its price target for GLXY’s stock to $24 from $21 and kept a ‘Neutral’ rating on the shares, according to TheFly. However, that target is lower than Galaxy’s share price of over $26 as of Tuesday’s close, implying a downside of nearly 9%.

The firm said the stronger-than-expected results were driven primarily by lower losses in non-operating segments, including treasury and corporate activities. That strength was partially offset by softer performance in core operating divisions such as digital assets and data centers, which typically command higher valuations.

However, CEO Mike Novogratz believes the business has “decoupled” from Bitcoin (BTC) for the first time ever.  During the first quarter (Q1) earnings call, he noted that while crypto prices dipped 20% and trading activity across the industry fell in tandem, trading volumes on Galaxy didn’t decline. Instead, they stayed flat.

“For the first time, we really started to see a decoupling of our business from the price, and that's very promising. If I could see that 4 quarters in a row, I would have a big grin on my face.” 

– Mike Novagratz, CEO, Galaxy Digital 

GLXY Stock Gains After Q1 Earnings

GLXY’s stock rose over 1% in pre-market trade, on track to hit its highest level since early February/late January. On Stocktwits, retail sentiment around the company rose to ‘extremely bullish’ from ‘bullish’ territory over the past day, and chatter rose to ‘extremely high’ from ‘normal’ levels.

The upward movement comes after the shares rallied more than 5% in the previous session after the company reported Q1 earnings that beat Wall Street expectations. Galaxy reported a loss per share of $0.49, better than the consensus estimate of a $0.93 loss per share, according to Koyfin data. Revenue came in at $10.1 billion, beating expectations of $8.7 billion. 

What Are Retail Traders Saying About GLXY’s Stock?

Retail traders on Stocktwits also noted that Galaxy’s shares were no longer trading like a Bitcoin proxy. One user said that for the decoupling to continue, Galaxy needs to keep pushing on the pedal on its Helios data center plans.

Another retail trader that Galaxy had successfully navigated its AI infrastructure pivot amid the volatility seen in cryptocurrency markets.

In the Q1 earnings report, the company announced that it had successfully delivered the first data hall to CoreWeave (CRWV) at the Helios data center campus. It said this marked the project’s transition from construction to revenue-generating operations under the Phase I lease agreement.

“The second is we've got to finance Phase II and then Phase III,” Novogratz said on the earnings call. “The financing markets are open. I was hoping we would have the definitive deal details today. Trust me, that will come in a very short order. We will have Phase II financed.”

Are GLXY Stock And BTC Price Decoupling?

Galaxy’s shares have gained more than 15% this year, while Bitcoin’s price has dropped more than 10%. In the last 12 months, Bitcoin has tumbled nearly 20%, while GLXY’s stock has jumped more than 75%

Novagratz said he remains bullish on the cryptocurrency market and Bitcoin in the long run, but said Bitcoin’s price action going forward largely depends on macroeconomic indicators. “$60K looks like a tradable bottom for Bitcoin,” he said. “Break $100K, and it’s pure price discovery.”

According to Novogratz, inflation and whether or not the Federal Reserve cuts rates will be the primary drivers behind Bitcoin’s price. He also anticipates that the CLARITY Act, caught in limbo since January, will be passed over the next six weeks.

Bitcoin’s price rose 1.2% in the last 24 hours, recovering to over $77,000. Retail sentiment around the apex cryptocurrency dipped to ‘neutral’ from ‘bullish’ territory over the past day, accompanied by chatter at ‘normal’ levels. 

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