Galaxy Digital's (GLXY) Helios II data center is expected to be classified within the Electric Reliability Council of Texas, or ERCOT's, Batch Zero Base Load, Morgan Stanley analysts said in a Thursday note.

Batch Zero is the framework ERCOT has been using to review requests from data centers for at least 75 megawatts of power from the Texas grid.

Analysts said the probability of Helios II energization is 95%, while the probability of energization for Caspian is 50%. Helios III and Selene are assigned 20% probabilities, respectively.

Caspian is eligible for Batch Zero Base Load classification, while Helios III and Selene are eligible for Batch Zero Studied Load classification.

Morgan Stanley said that securing power approvals and operator contracts could increase its assessed probabilities of commercialization and support Galaxy Digital's valuation.

Analysts said, however, that the growth in political opposition and lack of new power generation development and distribution construction are key risks for the stock.

Morgan Stanley retained an overweight rating on the stock and increased its price target to $48 from $37.

Price: 26.28, Change: +2.22, Percent Change: +9.23