Morgan Stanley has raised its price target on Galaxy Digital to $48 from $37, a roughly 30% increase, after concluding that the company's Helios II data-center project in Texas is close to securing a critical power connection. The bank now assigns a 95% probability that the facility will be "energized"—meaning it will receive electricity from the grid—under ERCOT's Batch Zero framework.
For everyday investors, this is a reminder that in the world of data centers, power is the new gold. Whether a facility is mining bitcoin or running artificial intelligence workloads, it cannot operate without a reliable and affordable electricity supply. In Texas, that means navigating the state's grid operator, ERCOT (the Electric Reliability Council of Texas), which manages power for most of the state.
What is ERCOT's Batch Zero?
ERCOT has created a process to handle the surge of large electricity requests from data centers. Batch Zero is an early review track for projects that meet certain criteria, including a minimum demand of 75 megawatts. Being placed in this "Base Load" category signals that a project is large enough to warrant special attention and is likely to move through the approval process more predictably.
Morgan Stanley's analysis suggests that Helios II will land in this favorable track, which is why the bank feels confident enough to assign a 95% probability of energization. The previous price target of $37 reflected more uncertainty about whether the project would get the green light.
Galaxy Digital, led by founder Mike Novogratz, is a diversified crypto financial services firm. It operates in trading, asset management, and mining, and its data centers are a key part of its mining operations. The Helios II project is an expansion of its existing Helios facility in West Texas, one of the largest bitcoin mining sites in North America.
Why power access matters so much
Data centers are massive consumers of electricity. A single large facility can use as much power as a small town. For bitcoin miners, electricity is often the largest operating cost, so securing cheap and stable power is essential to profitability. For AI data centers, the demand is even more intense, as training and running large language models requires enormous computing power.
This is not just a Texas story. Across the United States, utilities are struggling to keep up with the electricity demands of data centers. As power gear, not chips, becomes the new bottleneck, companies are racing to secure grid connections and build new capacity. The situation has become so acute that some utilities are asking major customers to prepay their power bills to help fund grid upgrades.
Morgan Stanley's upgrade of Galaxy Digital is part of a broader trend of analysts paying close attention to the power side of the digital economy. The bank has also recently highlighted the skilled worker and power shortages that threaten to slow AI data center growth.
What it means for investors
For investors in Galaxy Digital, the raised price target is a positive signal, but it comes with caveats. The 95% probability is not a guarantee—there is still a 5% chance that the energization does not happen as expected. Delays in grid connections are common, and ERCOT's processes can be complex.
More broadly, this news underscores the importance of power access as a key investment theme. Companies that own or operate data centers—whether for crypto or AI—are increasingly valued not just on their computing power but on their ability to secure electricity. As new companies file for IPOs to tap into AI data center power demand, and as established players like Vertiv acquire firms to speed up power delivery, the market is paying attention.
For the average investor, this story is a reminder that the digital economy runs on electrons. Whether you're investing in crypto, AI, or traditional tech, understanding the power supply chain can be as important as understanding the technology itself. Morgan Stanley's move suggests that Galaxy Digital is making real progress on that front, but as with any investment, there are no certainties.
As always, this is not a recommendation to buy or sell any stock. It's simply a look at what one major bank thinks about a company's prospects, and why power access is becoming a defining factor in the data center industry.
