Benchmark raises Hut 8 price target to $165, keeps buy rating

Benchmark raised its price target on Hut 8 to $165 from $85 and maintained a buy rating, citing faster commercialization of the company’s AI data center business and $16.8 billion in long-term AI infrastructure contract value. The firm said Hut 8 has secured a long-term revenue base through 15-year triple-net lease agreements spanning 597 megawatts of IT capacity at the River Bend campus in Louisiana and the Beacon Point campus in Texas, with an estimated base lease value of $16.8 billion that could rise to $42.8 billion if renewal options are exercised. Benchmark said a redesign of the Beacon Point project increased phase-one IT capacity to 352 megawatts from 224 megawatts, while the base-term values of the Beacon Point and River Bend leases are about $9.8 billion and $7 billion, respectively. Benchmark said shares were around $97 after falling nearly 30% over six weeks, implying about 69% upside to the new target. As Bitcoin miners increasingly push into AI and high-performance computing infrastructure to diversify revenue, Benchmark said Hut 8’s second-quarter results may understate the profitability of its AI infrastructure business because of mark-to-market accounting on Bitcoin holdings and the consolidation of American Bitcoin, or ABTC.