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Wall Street broker Benchmark said Hut 8 (HUT) has transformed from a bitcoin BTC$114,329.79 miner into a broader energy infrastructure company positioned to capitalize on artificial intelligence (AI) and high-performance computing (HPC) demand.
In a Tuesday report, analyst Mark Palmer reiterated his buy rating on the shares and more than doubled his price target to $78 from $36. Palmer cited a sum-of-the-parts analysis based on the company’s energy infrastructure pipeline, its 64% stake in American Bitcoin Corp. (ABTC), and the 10,264 BTC on its balance sheet as of June 30.
The shares were 0.7% lower in early trading at $38.57.
Palmer described the stock as a “flexible call option” on the rise of AI, HPC and bitcoin as well as on future energy-intensive applications.
Under CEO Asher Genoot, who took the helm in February 2024, Hut 8 has focused on controlling low-cost power infrastructure that can be deployed toward the most profitable workloads, with 1,530 megawatts (MW) of capacity under development aimed primarily at AI and HPC data centers, Palmer wrote.
The analyst noted that investors have rewarded Genoot’s strategy, with the stock more than quadrupling in the past six months. Even so, Hut 8’s intrinsic value still exceeds its market capitalization, he said.
Benchmark said near-term catalysts include a potential tenant signing at Hut 8’s River Bend site in Louisiana, while longer-term growth could come from replicating the model of its Vega facility in Texas.
The broker also highlighted the company’s 1,255 MW of capacity under exclusivity and 6,815 MW under diligence, both excluded from its valuation, and said its $6 million-per-MW estimate for current projects is about 50% below peer averages.
Read more: Hut 8 Maps ‘Path to Monetization’ of Energy Assets as Bitcoin Mining Carve-Out Nears: Benchmark
