TLDR
Benchmark analysts increased Hut 8’s (HUT) price target from $85 to $165 while keeping their Buy rating intact
With HUT trading near $99, the updated price target suggests approximately 65% potential upside
The company secured two 15-year lease agreements totaling 597 MW of IT capacity with $16.8B in base-term contract value
Hut 8 successfully secured $7.5B in non-dilutive project financing for its River Bend and Beacon Point facilities
The company’s development portfolio has expanded beyond 9 gigawatts spanning multiple project stages
On Tuesday, Benchmark analysts nearly doubled their price target for Hut 8 (HUT), elevating it to $165 from the previous $85 mark while maintaining a Buy recommendation. With HUT shares currently hovering around $99, this revised target suggests potential gains of approximately 65%.
Hut 8 Corp., HUT
Analyst Mark Palmer indicated that the market has yet to fully appreciate the company’s rapid execution velocity. Despite a nearly 30% decline in HUT shares over the last six weeks, the company’s operational momentum has remained strong. Notably, the stock has still delivered impressive year-to-date gains of 116%.
The catalyst behind this bullish revision is straightforward: Hut 8’s strategic transformation into AI-focused data center infrastructure is producing substantial, contractually guaranteed revenue streams.
Hut 8 recently executed two 15-year, triple-net, take-or-pay lease arrangements at its River Bend facility in Louisiana and Beacon Point campus in Texas. Combined, these facilities provide 597 megawatts of IT infrastructure capacity.
According to Palmer’s analysis, these agreements represent $16.8 billion in base-term lease value. Should tenants activate their renewal provisions, the total value could surge to $42.8 billion.
Beacon Point Campus Powers Valuation Surge
The Beacon Point facility in Texas served as the primary driver behind Benchmark’s elevated price target. Palmer’s calculations indicate that just the initial phase represents $9.8 billion in base-term contract value, translating to roughly $655 million in average annual net operating income.
Hut 8 recently finalized a $4.25 billion bond issuance through Beacon Point DC LLC, its subsidiary, to fund the Texas development. These senior secured notes feature a 6.129% interest rate with a 2042 maturity date. Moody’s awarded them a Baa2 rating, qualifying as investment-grade.
This financing round complements an earlier $3.25 billion capital raise for the River Bend development. Collectively, the company has obtained $7.5 billion in non-dilutive project capital — preserving shareholder equity.
Palmer characterized the company’s approach as transforming development properties into stable, long-term contracted revenue streams while simultaneously reducing capital costs. He likened Hut 8 to a “power-centric data center REIT with integrated development capabilities.”
Expanding Development Portfolio
In addition to its two active campuses, Hut 8 maintains a development pipeline exceeding 9 gigawatts across various stages, including projects under exclusivity agreements, active development, construction phases, and management.
For perspective, competing Bitcoin mining operators such as Core Scientific (CORZ), Hive Digital (HIVE), and Bit Digital (BTBT) have pursued comparable transitions into AI infrastructure. However, Hut 8’s financing magnitude and contract scale distinguish it from competitors.
Separately, Lucid Capital Markets launched coverage on HUT with a Buy rating and an even more aggressive $226 price target — significantly exceeding Benchmark’s $165 forecast.
The company also announced the appointment of E. Stanley O’Neal, former CEO of Merrill Lynch, as the new Chairman of its Board of Directors.
Benchmark cautioned that second-quarter financial results might appear volatile due to mark-to-market accounting treatments on bitcoin assets and the consolidation of American Bitcoin (ABTC), though these factors shouldn’t obscure the fundamental strength of the AI infrastructure business model.
