Hut 8’s River Bend deal is reshaping how Wall Street sees the bitcoin miner — and Benchmark has raised its stakes accordingly.
Benchmark analyst Mark Palmer reiterated a Buy on Hut 8 (HUT) and lifted his price target to $85 from $77, implying roughly 93% upside from last Friday’s close of $44.12. The stock was up modestly in premarket trade (about 2.8% to $45.34) after jumping as much as 20% when the River Bend agreement was announced.
What changed
Last Wednesday Hut 8 signed a headline-grabbing, $7 billion, 15-year lease with Fluidstack to convert its River Bend data center in Louisiana into AI-ready infrastructure. But Palmer argues the deal is more than a one-off lease: it signals a strategic pivot from a pure crypto miner to an institutional-grade digital infrastructure platform.
Why Benchmark is bullish
Palmer says several elements set this transaction apart from the recent wave of AI data center deals:
- Structure and counterparties: The deal includes multiple parties and investor protections that, in his view, reduce counterparty risk. Notably, Google provides a 15-year payment backstop — a feature Palmer calls a meaningful de-risker.
- Cash-flow quality and longevity: The long-dated, investment-grade-backed cash flows are attractive compared with shorter, riskier agreements seen elsewhere.
- Embedded expansion optionality: The agreement contains layered expansion rights — including a right of first offer (ROFO) to Fluidstack and three five-year renewal options — that could boost lifetime contract value to roughly $17.7 billion.
Valuation mechanics
Benchmark’s sum-of-the-parts (SOTP) approach factors in:
- The value of the River Bend lease (Benchmark pegs the initial 245 MW tranche at about $7.6 billion),
- Potential expansion capacity available under the ROFO,
- Hut 8’s stake in American Bitcoin Corp. (ABTC), and
- The bitcoin holdings on Hut 8’s balance sheet as of Sept. 30.
Palmer highlights timing as crucial: Hut 8 didn’t rush to monetize power assets during the early AI land grab, waiting instead for a structure that met internal return thresholds and strategic goals. He also emphasizes that Hut 8 retains full economic ownership of the asset without issuing warrants or equity sweeteners that have appeared in other deals.
Street reaction
Benchmark’s upgrade follows similar moves by peers: Cantor Fitzgerald raised its Hut 8 target to $72 from $64, and Canaccord moved its target to $62 from $54.
Bottom line
The River Bend agreement appears to be more than a financing maneuver — it’s a strategic repositioning that, according to Benchmark, transforms Hut 8 from a crypto-centric power owner into a player in institutional AI infrastructure, backed by long-term, higher-quality cash flows and sizable optional upside. Investors will be watching how the expansion rights and Google’s backstop play out as the project advances.
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