Wall Street broker Benchmark said Bitcoin miner Hut 8 (HUT) was using last week’s River Bend announcement to solidify the company’s move from a crypto-focused energy owner to an institutional-grade digital infrastructure platform.
Analyst Mark Palmer said the structure, considerations and quality of cash flows set HUT’s deal apart from the spate of recent AI data center deals. He reiterated his Buy rating on the stock and raised his price target from $77 to $85, suggesting a 93% upside from Friday’s close of $44.12. Shares are up 2.8% premarket to $45.34.
Last Wednesday, Hut 8 signed a $7 billion, 15-year AI data center lease with Fluidstack for its RIver Bend data center in Louisiana. Shares gained as much as 20% following the news.
“The transaction combined transaction economics superior to comparable transactions, long-term cash flows secured by quality investments and multiple levels of built-in expansion options across three counterparties,” Palmer said.
Palmer’s overall valuation (SOTP) includes the value of the River Bend lease, potential future expansion capacity under a right of first offer granted to Fluidstack, Hut 8’s stake in American Bitcoin Corp. (ABTC) and bitcoin held on its balance sheet as of September 30.
Palmer said a key point was timing. Management did not rush to monetize energy assets at the start of the AI infrastructure land grab, instead waiting for a setup that met internal return hurdles and strategic criteria.
He pointed to Google’s (GOOG) 15-year payment backstop as a significant risk-reducing feature that he believes reduces counterparty risk while allowing Hut 8 to retain full economic ownership without warrants or equity sweeteners that have appeared in other transactions.
The report notes that three five-year renewal options could bring the total contract value to approximately $17.7 billion.
Benchmark said it values River Bend’s initial 245 megawatt (MW) tranche at approximately $7.6 billion, reflecting contractual cash flow and the rare value of AI-ready power backed by an investment-grade safety net.
Rival broker Cantor Fitzgerald last week raised its Hut 8 price target from $64 to $72, while Canaccord raised its target from $54 to $62.
Learn more: Hut 8 price target raised at Cantor and Canaccord after Google-backed AI deal
