Benchmark Raises Hut 8 Price Target as Bitcoin Miner Aims to Boost Energy Capacity

In brief

Hut 8’s expansion plans mean its stock will rise and is worth buying, according to investment bank Benchmark.
The Bitcoin miner on Tuesday unveiled plans to develop 1.53 gigawatts of new capacity across four U.S. sites.
Hut 8 earlier this year signed a deal to contribute its Bitcoin mining equipment and help debut a new miner, American Bitcoin.

Investment bank Benchmark has reiterated Bitcoin miner Hut 8’s “buy” rating while raising its price target to $36 from $33 following the Nasdaq-listed firm’s expansion plans.

Benchmark’s Senior Equity Research Analyst Mark Palmer said in a note that the company’s plans to grow would “establish it as one of the largest owners of power that could be used for AI/high-power computing workloads, Bitcoin mining, or other purposes.”

Hut 8 on Tuesday revealed plans to develop 1.53 gigawatts of new capacity across four U.S. sites. The new sites will be used to provide energy for other computing purposes, not Bitcoin mining, the company said.

“Ultimately, by decoupling energy infrastructure from mining, HUT will increase its financial flexibility and put itself in a stronger position to execute on growth opportunities at scale while preserving upside exposure to bitcoin through a 64% stake in American Bitcoin,” the note read.

Palmer added that Hut 8’s announcement “underlined a real path to monetization for its burgeoning power pipeline over the next few years.”

In March, Hut 8 signed a deal with American Data Centers Inc., a company backed by President Donald Trump’s sons Eric and Donald Jr., to contribute its Bitcoin mining equipment and help debut a new miner, American Bitcoin.

American Bitcoin will soon go public. According to the Trumps, it plans to be “the world’s largest and most efficient Bitcoin miner.”

Shares of Hut 8 (NASDAQ: HUT) rose by more than 1% Wednesday morning Eastern Time.

Hut 8 was previously based in Toronto, Canada but in 2023 merged with U.S. Bitcoin Corp. and is now based in Miami, Florida.

Companies in the cutthroat Bitcoin mining space are increasingly branching out to the world of AI and high-performance computing. Bitcoin mining is the industry that mints new coins for the crypto network and requires huge amounts of electricity to do so.

Bitcoin miners can pivot to using resources to run AI datacenters when mining Bitcoin becomes harder, although experts told Decrypt that it isn’t always easy.