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Benchmark lifts Hut 8 target to $85, citing long-term AI data center cash flows replacing mining-linked revenue

15-year River Bend lease spans 245MW, includes Google payment backstop and 3% annual rent escalator

Valuation reflects $7.6B River Bend tranche, expansion rights, and stake in American Bitcoin

Benchmark has raised its price target on Hut 8 (NASDAQ: $HUT ) to $85, citing the structure and scale of the company's newly disclosed AI data center agreement as a material shift in its projected revenue profile. The revised target, up from $78, was outlined in a research note published Monday by Benchmark analyst Mark Palmer, who maintained a "buy" rating on the stock.

Hut 8, historically known as a Bitcoin mining operator, has increasingly positioned itself as an infrastructure developer. Benchmark said the latest agreement supports that transition by introducing long-dated, contracted cash flows tied to AI computing demand rather than commodity-linked mining revenues.

Structure of the River Bend Agreement

According to Benchmark, the core of the transaction is a 15-year, triple-net lease covering 245 megawatts of IT capacity at Hut 8's River Bend campus in Louisiana. The lease carries an estimated base value of about $7 billion and includes an annual rent escalator of 3%. Benchmark highlighted that the arrangement also includes a payment backstop from Google, which the firm said lowers counterparty risk relative to other AI colocation deals.

The tenant structure involves a partnership with Anthropic and infrastructure provider Fluidstack. Benchmark said the combination of long contract duration, credit support, and counterparties differentiates the deal from other transactions in the AI infrastructure market.

Valuation Implications and Asset Ownership

Benchmark noted that Hut 8 did not issue equity or warrants as part of the agreement, a feature the firm said is common in comparable AI data center transactions. As a result, Hut 8 retains full economic ownership of the River Bend asset. Based on contracted cash flows and the limited availability of AI-ready power supported by an investment-grade backstop, Benchmark estimated the initial River Bend tranche alone at approximately $7.6 billion.

Beyond the first phase, Benchmark pointed to what it described as embedded expansion rights. These include a right of first offer for up to 1,000 additional megawatts at the River Bend site, as well as a separate framework to develop as much as 1.05 gigawatts across Hut 8's wider development pipeline in collaboration with Anthropic.

The $85 price target also incorporates a sum-of-the-parts valuation that accounts for Hut 8's 60% ownership interest in American Bitcoin and the company's bitcoin holdings. Hut 8 shares were trading just below $50 on Monday morning, near a multi-year high reached in October.

Shares of Hut 8 (HUT) are trading at $51.87, up 17.79 percent.