Wall Street broker Benchmark said bitcoin miner Hut 8 (HUT) is using last week’s River Bend announcement to cement the shift from a crypto energy owner to an institutional-grade digital infrastructure platform.
Analyst Mark Palmer said structure, counterparties and cash flow quality separate the HUT deal from the wave of recent AI data center deals. He reiterated his Buy rating on the stock and raised his price target to $85 from $77, suggesting a 93% upside from Friday’s close of $44.12. Shares rose 2.8% premarket to $45.34.
Last Wednesday, Hut 8 signed a 15-year, $7 billion AI data center lease with Fluidstack for its RIver Bend data center in Louisiana. Shares rose up to 20% on the news.
“The transaction combined superior deal economics relative to peer agreements, long-term investment grade backed cash flows and multiple layers of integrated expansion optionality between three counterparties,” Palmer said.
Palmer’s sum-of-the-parts (SOTP) valuation includes the value of River Bend’s lease, potential future expansion capacity under a right of first offer granted to Fluidstack, Hut 8’s stake in American Bitcoin Corp. (ABTC), and the bitcoin held on its balance sheet as of Sept. 30.
Palmer said a key point is timing. Management did not rush to monetize energy assets at the outset of the AI infrastructure land grab, but instead waited for a setup that met internal return hurdles and strategic criteria.
He pointed to Google’s (GOOG) 15-year payments support as a significant risk-reducing feature that he believes reduces counterparty risk while allowing Hut 8 to maintain full economic ownership without collateral or equity sweeteners that have appeared in other deals.
The report noted that three five-year renewal options could bring the total value of the contract to around $17.7 billion.
Benchmark said it values River Bend’s initial tranche of 245 megawatts (MW) at approximately $7.6 billion, reflecting contracted cash flows and the value of shortfall AI-ready power backed by investment-grade backstopping.
Rival broker Cantor Fitzgerald last week raised his price target on Hut 8 to $72 from $64, while Canaccord raised its price target to $62 from $54.
Read more: Hut 8 price target raised on Cantor and Canaccord after Google-backed AI deal
