Benchmark Increases Hut 8 Price Target as Bitcoin Miner Seeks to Expand Energy Capacity

Benchmark has reaffirmed Hut 8’s “buy” rating and increased its price target to $36 from $33 at the back of the firm’s expansion initiatives. 

Mark Palmer, Senior Equity Research Analyst at Benchmark, noted that Hut 8’s growth plans position it as a leading owner of power that can be utilized for numerous applications, including AI computation, Bitcoin mining, and others.

On Tuesday, Hut 8 announced its strategy to develop 1.53 gigawatts across four U.S. locations. These new installations are intended to generate energy for various computing needs beyond Bitcoin mining.

“By separating energy facilities from mining, Hut 8 can enhance its financial adaptability and position itself favorably for significant growth opportunities while retaining a 64% ownership in American Bitcoin,” read the note.

Palmer emphasized that Hut 8’s disclosure represents a clear route towards monetizing its growing power infrastructure in coming years.

In March, Hut 8 entered an agreement with American Data Centers Inc., backed by President Trump’s sons, to utilize its Bitcoin mining technology in the launch of American Bitcoin.

American Bitcoin plans to go public soon, aiming to become “the largest and most efficient Bitcoin miner in the world,” according to the Trump family.

Hut 8 shares (NASDAQ: HUT) climbed over 1% by Wednesday morning Eastern Time.

Previously located in Toronto, Hut 8 merged with U.S. Bitcoin Corp. in 2023, and is now headquartered in Miami, Florida.

As competition intensifies in the Bitcoin mining sector, companies are increasingly venturing into AI and high-performance computing. Mining Bitcoin is energy-intensive and essential for creating new coins for the crypto ecosystem.

When Bitcoin mining becomes challenging, miners can redirect resources towards operating AI data centers, but experts informed Decrypt that this transition isn’t always straightforward.