Hut 8’s $7B AI Data Center Deal with Fluidstack Boosts Stock Target to $85

TLDR

• Hut 8’s $7B AI data center deal secures long-term cash flow and growth potential.
• Benchmark raised Hut 8’s target to $85, reflecting strong institutional shift.
• Google’s payment backstop minimizes risk for Hut 8 in its AI data center venture.
• Hut 8’s $17.7B AI contract value potential includes expansion and renewal options.

Benchmark recently raised its price target for Hut 8 (HUT) to $85, up from $77, following the company’s significant agreement with Fluidstack. The deal involves a $7 billion, 15-year lease for Hut 8’s River Bend AI data center in Louisiana. The deal’s structure has attracted attention from analysts, as it marks a shift in Hut 8’s business strategy from a crypto-first operation to a more diversified digital infrastructure platform. This move is expected to have lasting effects on Hut 8’s financial outlook, with analysts seeing a 93% upside from the current stock price.

Benchmark’s Optimistic Outlook for Hut 8

Mark Palmer, an analyst at Benchmark, pointed out that the deal’s structure and the involvement of a high-quality counterparty, Google-backed Fluidstack, set this deal apart from other recent AI agreements. Palmer raised his price target for Hut 8 to $85, suggesting the stock could see considerable upside based on the strength of the deal.

“The transaction combines superior deal economics, long-dated cash flows, and multiple layers of embedded expansion optionality,” Palmer noted. These factors, he argues, position Hut 8 to benefit from its strategic move into AI and digital infrastructure.

Hut 8’s ability to negotiate favorable terms without the need for warrants or equity sweeteners—unlike some competitors in the space—also adds confidence to its future prospects. This approach has drawn positive attention from analysts, signaling that Hut 8 is moving into an institutional-grade digital infrastructure model.

River Bend Deal Enhances Hut 8’s Institutional Appeal

The $7 billion deal signed last week between Hut 8 and Fluidstack represents a major shift in Hut 8’s business model. Rather than focusing solely on cryptocurrency mining, Hut 8 is now embracing the growing demand for AI infrastructure. The deal provides Hut 8 with long-term, investment-grade-backed cash flows, thanks to the involvement of Fluidstack, which is backed by Google. The deal includes multiple layers of expansion options that could significantly increase its value. These options, including three five-year renewal opportunities, could bring the total contract value to as much as $17.7 billion, according to Palmer’s analysis.

Hut 8’s deal timing also stands out. The company resisted the temptation to rush into AI infrastructure deals amid the current land grab for resources in this sector. Instead, Hut 8 took a more measured approach, securing a deal that met its internal return hurdles and strategic criteria. Palmer noted that this careful timing allowed Hut 8 to lock in favorable terms, giving the company a stronger foundation moving forward.

Strategic Benefits of the AI Data Center Lease
The River Bend lease agreement has given Hut 8 access to valuable AI-ready power infrastructure. Benchmark values the initial 245 MW tranche of the deal at around $7.6 billion, reflecting the scarcity and demand for such resources in today’s market. The involvement of a Google-backed counterparty, along with the long-term nature of the agreement, reduces Hut 8’s exposure to market volatility, making the deal more attractive from a risk management perspective.

This deal reflects Hut 8’s broader strategy of becoming a more diversified player in the digital infrastructure market. By securing long-term, investment-grade contracts, Hut 8 is positioning itself as an institutional-grade provider of AI and digital infrastructure services. The company’s strategy appears to be paying off, as analysts such as Palmer have upgraded their outlook for Hut 8’s stock, citing the potential growth and stability offered by the River Bend lease.

The post Hut 8’s $7B AI Data Center Deal with Fluidstack Boosts Stock Target to $85 appeared first on CoinCentral.