Wall Street brokerage Benchmark said bitcoin miner Hut 8 (HUT) is using last week’s River Bend announcement to cement a shift from a crypto-first electricity owner to an institutional-grade digital infrastructure platform.
Analyst Mark Palmer said the structure, counterparties and cash flow quality set HUT’s deal apart 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 93% upside from Friday’s close of $44.12. Shares are up 2.8% premarket at $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 as much as 20% on the news.
“The transaction combined superior deal economics relative to peer deals, long-term investment-grade cash flow backstops and multiple layers of embedded extensibility across three counterparties,” Palmer said.
Palmer’s sum-of-the-parts (SOTP) valuation includes the River Bend lease value, potential future expansion capacity under an initial offer made to Fluidstack, Hut 8’s stake in American Bitcoin Corp. (ABTC) and the bitcoin held on its balance as of September 30.
Palmer said a key point is timing. Management did not rush to monetize power assets early in the AI infrastructure catch-up, instead waiting for a configuration that met internal hurdles and strategic criteria.
He marked the 15-year payment backstop from Google ( GOOG ) as a meaningful de-risking that he believes lowers counterparty risk while allowing Hut 8 to retain full financial ownership without the warrants or equity sweeteners that have appeared in other deals.
The report noted that three five-year renewal options could lift the total contract value to about $17.7 billion.
Benchmark said it values the initial 245 megawatt (MW) River Bend tranche at about $7.6 billion, reflecting contracted cash flows and the scarcity value of AI-ready power backed by an investment-grade backstop.
Rival broker Cantor Fitzgerald last week raised its Hut 8 price target to $72 from $64, while Canaccord raised its target to $62 from $54.
Read more: Hut 8 price target increases at Cantor and Canaccord after Google-backed AI deal
