TLDR
- Benchmark increased Hut 8 (HUT) stock price target from $85 to $165 while keeping its Buy rating intact
- With HUT trading near $99, the updated target suggests potential upside of approximately 65%
- The company secured two 15-year lease agreements for 597 MW of IT capacity, representing $16.8B in base-term lease value
- Hut 8 secured $7.5B in non-dilutive project financing for its River Bend and Beacon Point facilities
- The firm’s development portfolio now exceeds 9 gigawatts spanning multiple project phases
On Tuesday, Benchmark dramatically increased its price target for Hut 8 (HUT) stock to $165 from the previous $85, while maintaining its Buy recommendation. Trading around $99, HUT shares could see approximately 65% gains if the new target proves accurate.
According to analyst Mark Palmer, the market has undervalued the company’s rapid execution. Despite a nearly 30% decline over the last six weeks, HUT has maintained operational momentum and still boasts a 116% gain year-to-date.
The core driver behind this bullish outlook is straightforward: Hut 8’s transformation into an AI data center infrastructure provider is producing substantial, guaranteed revenue streams.
The company has locked in two 15-year triple-net, take-or-pay agreements at its Louisiana-based River Bend facility and its Beacon Point site in Texas. These locations provide a combined 597 megawatts of IT capacity.
Palmer calculates these agreements are worth $16.8 billion in base-term lease value. Should tenants opt for renewal extensions, total value could reach $42.8 billion.
Texas Campus Powers Revised Forecast
The Beacon Point facility in Texas served as the primary catalyst for Benchmark’s enhanced projection. Palmer calculates that just the initial phase represents $9.8 billion in base-term contract value, generating approximately $655 million in average annual net operating income.
Through its Beacon Point DC LLC subsidiary, Hut 8 recently completed a $4.25 billion bond issuance 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 investment-grade rating.
This financing follows a previous $3.25 billion capital raise for the River Bend facility. Combined, these transactions total $7.5 billion in non-dilutive project financing — preserving shareholder equity.
Palmer characterized the company’s approach as transforming development properties into long-duration contracted income streams that reduce capital costs. He positioned Hut 8 as a “power-first data center REIT with an embedded development machine.”
Expanding Development Portfolio
Beyond its two active campuses, Hut 8 maintains over 9 gigawatts in its development queue across projects in exclusivity, development, construction, and management stages.
For perspective, fellow Bitcoin mining companies such as Core Scientific (CORZ), Hive Digital (HIVE), and Bit Digital (BTBT) have pursued comparable AI infrastructure strategies. However, Hut 8’s financing magnitude and contract scale establish a distinct competitive position.
Separately, Lucid Capital Markets launched coverage on HUT with a Buy rating and a $226 price target — significantly exceeding Benchmark’s $165 figure.
The company also named E. Stanley O’Neal, previously CEO of Merrill Lynch, as its new Board Chair.
Benchmark cautioned that Q2 financial results might appear unclear due to mark-to-market accounting for bitcoin assets and the consolidation of American Bitcoin (ABTC), though these factors obscure the robust AI infrastructure fundamentals.
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