Galaxy Digital's (GLXY) power assets remain undervalued, with near-term catalysts including a tenant announcement and potential regulatory developments, Morgan Stanley said in a note Wednesday.

The firm said the company delivered the first phase 1 data hall to CoreWeave on time and on budget, and confirmed the end tenant is a "multi-trillion-dollar, investment-grade public company."

The firm added that Q2 will mark the first quarter with a meaningful profit and loss contribution from data centers, signaling a shift from a cyclical, crypto-driven financial services model toward a data center business with crypto optionality and a smoother earnings profile.

Updated timing for tenant selection on the 830-megawatt capacity has shifted to H2, slightly later than expected, the firm said. However, the energization timeline remains unchanged, with substation buildout still the key constraint, the firm said. Chief Executive Mike Novogratz said he had hoped to share definitive financing details for phase 2 of the CoreWeave project, suggesting an announcement is close, Morgan Stanley said.

Morgan Stanley reiterated its overweight rating on Galaxy Digital and adjusted its price target to $37 from $36.

Price: 25.21, Change: -1.16, Percent Change: -4.38