Shares of Hut 8 drew renewed attention after Benchmark raised its price target on the company to $85, citing improved earnings visibility following a newly announced artificial intelligence data center agreement. The research firm reiterated a buy rating, arguing that the deal represents a structural shift in the quality and durability of Hut 8’s cash flows as it transitions further from pure bitcoin mining toward digital infrastructure development. According to Benchmark, the agreement stands out among recent AI colocation transactions due to its long duration, strong counterparties, and downside protection. The firm emphasized that the structure reduces exposure to operating cost volatility while securing predictable, long dated revenue streams. The revised valuation reflects confidence that Hut 8’s infrastructure assets are increasingly positioned to benefit from sustained demand for AI ready power capacity, rather than being tied solely to the cyclicality of crypto mining markets.
At the center of the upgrade is a 15 year triple net lease covering an initial 245 megawatts of IT capacity at Hut 8’s River Bend campus in Louisiana. Under the agreement, operating cost risk is largely transferred to the tenant, while Hut 8 retains ownership of the underlying asset and avoids dilution through equity or warrant issuance. Benchmark estimates the base value of the lease at roughly $7 billion, supported by a three percent annual rent escalator and a payment backstop provided by Google, which materially reduces counterparty risk. The tenant structure involves partnerships with Anthropic and Fluidstack, giving the project exposure to established players in the AI ecosystem. Analysts highlighted that the scarcity of AI ready power with investment grade backing supports a higher valuation multiple than comparable infrastructure assets.
Beyond the initial phase, Benchmark pointed to what it described as significant embedded expansion optionality within the agreement. Hut 8 retains a right of first offer to scale up to an additional 1,000 megawatts at the River Bend site, alongside a broader framework to develop as much as 1.05 gigawatts across its wider pipeline in collaboration with Anthropic. This optionality allows capacity expansion without upfront capital commitments, preserving balance sheet flexibility while maintaining exposure to future demand growth. Benchmark’s $85 price target also incorporates the value of Hut 8’s majority stake in American Bitcoin and its existing bitcoin holdings, using a sum of the parts approach. With shares trading near recent highs, the revised outlook reflects growing investor focus on infrastructure driven revenue stability rather than mining output alone.
