Wall Street broker Benchmark has indicated that bitcoin miner Hut 8 (HUT) is leveraging last week’s River Bend announcement to solidify its transition from a crypto-centric power owner to an institutional-caliber digital infrastructure platform.
Analyst Mark Palmer noted that the deal’s structure, counterparties, and cash-flow quality distinguish HUT’s agreement from the recent surge in AI data center contracts. He maintained his buy rating on the stock and increased his price target to $85 from $77, indicating a potential upside of 93% from Friday’s closing price of $44.12. Shares rose by 2.8% in premarket trading to $45.34.
On Wednesday, Hut 8 finalized a $7 billion, 15-year AI data center lease with Fluidstack for its River Bend data center located in Louisiana. Following the announcement, shares jumped by as much as 20%.
“This transaction combines superior deal economics compared to peer agreements, long-term, investment-grade-backed cash flows, and several layers of embedded expansion optionality across three counterparties,” Palmer remarked.
Palmer’s sum-of-the-parts (SOTP) analysis factors in the River Bend lease value, prospective future expansion capacity under a right of first offer granted to Fluidstack, Hut 8’s ownership stake in American Bitcoin Corp. (ABTC), and the bitcoin reserves on its balance sheet as of September 30.
A significant aspect is the timing. Management strategically opted not to hastily monetize power assets during the AI infrastructure rush, waiting instead for configurations that aligned with internal return benchmarks and strategic goals.
The 15-year payment backstop from Google (GOOG) is flagged as a crucial de-risking factor, which Palmer believes reduces counterparty risk while allowing Hut 8 to retain full economic ownership without warrants or equity sweeteners commonly seen in other arrangements.
The report highlighted that three five-year renewal options could elevate the total contract value to approximately $17.7 billion.
Benchmark estimates the initial 245 megawatt (MW) River Bend tranche to be worth about $7.6 billion, reflecting contracted cash flows and the unique value of AI-ready power backed by an investment-grade guarantee.
Competitor Cantor Fitzgerald recently raised its price target for Hut 8 to $72 from $64, while Canaccord increased its target to $62 from $54.
Read more: Hut 8 price target boosted at Cantor and Canaccord after Google-backed AI deal
