Investment bank Benchmark raised its price target for bitcoin miner Hut8 following news that the company signed a second 15-year lease worth $9.8 billion for its AI data center.
In a note Wednesday, equity research analyst Mark Palmer reiterated his Buy rating on the Toronto- and Nasdaq-listed mining company and raised his price target to $195 from $165. That’s an 80% increase from Hut8’s current stock price of nearly $110 a pop.
Palmer argued that the deal validates Hut 8’s “power-first” approach to building AI infrastructure.
Hut 8 announced Monday that it has signed a second 15-year lease for 352 megawatts of IT capacity at its Beacon Point campus in Nueces County, Texas. This will allow the site’s tenants to double their contracted capacity to 704MW and fully commercialize the campus for a commercial capacity of 1,000MW. Hut8 shares rose more than 10% on the news, reaching a high of over $106 before closing around $101.
Once stabilized, Palmer estimates that the new Beacon Point lease alone could contribute approximately $655 million annually to net operating income, and if the renewal option is exercised, the total contract value for the campus could reach $50.2 billion.
Hut 8 is one of a growing list of Bitcoin-listed companies pivoting to AI and high-performance computing as falling Bitcoin prices and rising difficulty squeeze mining margins.
In December, the company signed a deal with Anthropic and Fluidstack, backed by Google, to build up to 2.3 gigawatts of AI data center capacity in the United States.
Hut 8 mining operations
While rival companies such as Terawulf, IREN and Cipher Mining have similar multi-year HPC deals with Google and Microsoft, Bitfarms announced last year that it would wind down its mining operations completely to focus on high-performance computing.
In contrast, Hut8 continues its mining operations through a majority stake in American Bitcoin, a mining venture backed by Eric Trump and Donald Trump Jr.
Hut 8 is scheduled to report second quarter earnings on August 4th.
The article Benchmark raises Hut8 price target after Bitcoin miner signs $9.8 billion AI data center deal was first published in Bitcoin Magazine and written by Mathew Di Salvo.
