SKN | Hut 8’s AI Data Center Deal Signals Strategic Pivot as Benchmark Lifts Price Target to $85

Hut 8’s latest AI infrastructure deal is reshaping how Wall Street views the company, marking a decisive shift away from a pure-play bitcoin miner toward a long-duration, institutional-grade digital infrastructure platform. The change in perception has translated quickly into analyst action, with Benchmark lifting its price target and reinforcing bullish sentiment across the Street.

From Bitcoin Miner to Infrastructure Platform

Last week, Hut 8 signed a 15-year, $7 billion lease agreement with AI infrastructure firm Fluidstack for its River Bend data center in Louisiana. The site will initially support 245 megawatts of AI-ready power capacity, with multiple layers of expansion and renewal embedded in the contract.

Benchmark analyst Mark Palmer said the deal underscores a structural transition for Hut 8, moving it from a crypto-first power owner into a provider of long-dated, institutional infrastructure assets. He raised his price target on the stock to $85 from $78 and reiterated a buy rating, implying roughly 90% upside from recent levels.

Shares jumped as much as 20% following the announcement and continued to trade higher in subsequent sessions, reflecting growing confidence in the company’s evolving business model.

Why This Deal Stands Apart

According to Benchmark, the River Bend agreement differs materially from many recent AI data center transactions. The contract combines long-term visibility, investment-grade credit support and embedded optionality across multiple counterparties.

A critical element is the payment backstop provided by Google, which guarantees lease payments and operating costs. Palmer described this feature as a significant de-risking mechanism that sharply reduces counterparty risk while allowing Hut 8 to retain full economic ownership of the asset, without warrants or equity concessions often seen in similar deals.

The structure also includes three five-year renewal options and expansion rights that could raise the total contract value to approximately $17.7 billion over time.

Valuation Beyond the Headline Numbers

Benchmark’s analysis values the initial River Bend tranche at roughly $7.6 billion, reflecting contracted cash flows and the scarcity premium for AI-ready power supported by an investment-grade backstop. Palmer’s sum-of-the-parts valuation also incorporates Hut 8’s future expansion capacity, its stake in American Bitcoin Corp., and the bitcoin held on its balance sheet as of the end of September.

Timing was another key factor highlighted in the report. Hut 8 refrained from monetizing its power assets early in the AI infrastructure land grab, waiting instead for a configuration that met internal return hurdles and strategic objectives. That patience, Benchmark argues, allowed the company to secure more favorable economics than peers that rushed to market.

Street Consensus Turning More Positive

Benchmark’s upgrade adds to a growing list of bullish revisions. Cantor Fitzgerald recently lifted its price target to $72, while Canaccord raised its view to $62, both citing the durability and quality of cash flows tied to the Fluidstack agreement.

Collectively, these revisions suggest that investors are beginning to value Hut 8 less on short-term bitcoin price fluctuations and more on its role as a long-term supplier of power and infrastructure to the AI economy.

Looking Ahead

With more than 900 megawatts under development and additional capacity under exclusivity, Hut 8’s River Bend deal may represent the opening move in a broader repositioning. If execution matches the contract’s structure, the company could emerge as a hybrid infrastructure player spanning AI compute and digital assets — a profile that commands a very different valuation framework than traditional crypto mining.