Bitcoin miner Hut 8 (HUT) is using last week’s River Bend announcement to solidify its shift from a cryptocurrency-first power holder to an institutional-grade digital infrastructure platform, Wall Street brokerage Benchmark said.
Analyst Mark Palmer said the structure, counterparties and cash flow quality distinguish HUT’s deal from the recent wave of artificial intelligence data center agreements. He reiterated his buy rating on the stock and raised his price target to $85 from $77, representing a 93% upside from Friday’s closing price of $44.12. Shares rose 2.8% to $45.34 in pre-market trading.
Last Wednesday, Hut 8 and Fluidstack signed a $7 billion, 15-year artificial intelligence data center lease contract for its RIver Bend data center in Louisiana. After the news broke, the stock price rose by 20%.
“The transaction combines superior transaction economics relative to peer transactions, long-term, investment-grade backed cash flows, and multiple layers of embedded expansion options across three counterparties,” Palmer said.
Palmer’s sum-of-the-parts (SOTP) valuation includes the River Bend lease value, potential future expansion capacity under the right of first refusal granted to Fluidstack, Hut 8’s stake in American Bitcoin Corp. (ABTC) and the Bitcoin holdings on its balance sheet as of September 30.
The key, Palmer said, is timing. In the early days of AI infrastructure land grabs, management was not eager to monetize power assets, instead waiting for deployments that met internal return hurdles and strategic criteria.
He labeled Google’s (GOOG) 15-year payment support as a meaningful de-risking feature that, in his view, reduces counterparty risk while allowing Hut 8 to retain full economic ownership without the warrants or equity sweeteners seen in other deals.
The report noted that three five-year extension options could increase the total contract value to approximately $17.7 billion.
Benchmark said it valued the initial 245 megawatt (MW) portion of River Bend at approximately $7.6 billion, reflecting contracted cash flow and the scarcity value of AI-ready power backed by investment-grade backing.
Rival broker Cantor Fitzgerald last week raised its price target on Hut 8 to $72 from $64, while Canaccord raised its price target from $54 to $62.
Read more: Cantor and Canaccord raise Hut 8 price targets after Google-backed AI deal
