Wall Street broker Benchmark nearly doubled its price target on Hut 8 (HUT) to $165 from $85, while reiterating its buy rating on the stock. According to reports from Benchmark, this represents approximately 65% upside from Hut 8's current price near $100. Analyst Mark Palmer cited the value created by the Beacon Point AI data center project as the primary driver behind the higher valuation, arguing that the market has yet to fully reflect Hut 8's rapid execution despite the stock falling nearly 30% over the past six weeks.
Hut 8 has secured significant AI infrastructure commitments through its Beacon Point project. As reported by Benchmark, the company signed two 15-year, triple-net, take-or-pay leases covering 597 megawatts of IT capacity at its River Bend, Louisiana, and Beacon Point, Texas campuses. The agreements represent $16.8 billion in contracted base-term lease value and could rise to $42.8 billion if tenants exercise renewal options. According to Palmer, the Beacon Point agreement alone carries $9.8 billion in base-term contract value and approximately $655 million in average annual net operating income.
Hut 8 has demonstrated strong execution in project financing, recently completing $4.25 billion of investment-grade project financing for Beacon Point after raising $3.25 billion for River Bend. As reported by Benchmark, the deals validate management's strategy of lowering the cost of capital by converting development assets into long-term contracted cash flows. Beyond existing projects, Hut 8's development pipeline totals more than 9 gigawatts across projects under exclusivity, development, construction and management, providing what the broker calls a long runway for future growth.
The broker emphasized Hut 8's transformation into an AI infrastructure platform, noting the company's evolution into something akin to a power-first data center REIT with an embedded development machine. According to Benchmark, companies including Hut 8, Core Scientific (CORZ), Hive Digital (HIVE) and Bit Digital (BTBT) have repositioned portions of their power and infrastructure assets to serve AI workloads, betting that long-term contracts with hyperscale customers will generate steadier, higher-margin revenue than cryptocurrency mining alone. While the broker expects second-quarter results to be distorted by mark-to-market accounting for bitcoin holdings and consolidation of American Bitcoin (ABTC), it said these factors obscure the underlying economics of the company's AI infrastructure business.
