Hut 8 Signs $7 Billion AI Data Center Lease With Fluidstack, Leading to Price Target Raises
Hut 8 has entered into a $7 billion, 15-year AI data center lease agreement with Fluidstack for its River Bend data center located in Louisiana. This deal marks a strategic shift from a crypto-first power ownership model to an institutional-grade digital infrastructure platform, characterized by long-dated, investment-grade backed cash flows and multiple expansion options involving three counterparties.
The initial River Bend tranche carries a valuation of approximately $7.6 billion for 245 MW capacity. Additionally, there are three five-year renewal options that could increase the total contract value to around $17.7 billion. The agreement includes a right of first offer for Fluidstack on any further expansion. Hut 8's stake in American Bitcoin Corp. and the bitcoins held on its balance sheet as of September 30 also factor into the overall valuation.
A significant feature of the deal is Google's role as a payment backstop, which is seen as reducing counterparty risk. This arrangement enables Hut 8 to retain full economic ownership without issuing warrants or equity sweeteners.
Following the announcement, Hut 8's shares experienced intraday gains of up to approximately 20%, trading premarket around $45.34. Benchmark analyst Mark Palmer raised Hut 8’s price target from $78 to $85 and maintained a buy rating. Similarly, Cantor Fitzgerald and Canaccord increased their price targets to $72 and $62 respectively, reflecting the positive market response to the deal.
