Benchmark raises Hut 8 price target to $85 after AI data center deal

Benchmark analyst Mark Palmer reiterated a "buy" rating on Hut 8 and raised its price target from $78 to $85, viewing the company's recent AI data center agreement as a major improvement to its cash flow quality and durability. The deal involves a 15-year, triple-net lease for 245 megawatts at the River Bend campus, valued at roughly $7 billion, featuring a 3% annual rent escalator and a payment backstop from Google, which reduces counterparty risk. Notably, Hut 8 secured this deal without issuing equity, retaining full economic ownership of the asset. Benchmark also highlighted future expansion options at River Bend and with Anthropic. The $85 target incorporates a sum-of-the-parts valuation, including Hut 8's stake in American Bitcoin and its bitcoin holdings.

(Source：The Block)