Benchmark raises Hut 8 target to $165 amid $16.8B in AI data center contracts
The analyst firm nearly doubled its price target as the Bitcoin miner's pivot to AI infrastructure gains serious momentum with hyperscale lease deals.
Benchmark just slapped a $165 price target on Hut 8, nearly doubling its previous $85 mark. The catalyst: $16.8 billion in contracted lease value across two hyperscale AI data center projects, with the potential to balloon to $42.8 billion when renewal options are factored in.
The Beacon Point effect
The centerpiece of Hut 8’s transformation is Beacon Point, an AI data center campus in Texas that landed a $9.8 billion, 15-year lease deal announced back in May 2026. That single contract carries an average annual net operating income of roughly $655 million.
The market noticed. Shares surged nearly 30% following the Beacon Point lease announcement on May 6, 2026. Benchmark’s July 14 upgrade suggests the firm believes there’s still significant upside left to capture as the project moves toward full commercialization.
Financing appears solid, too. Hut 8 has secured $4.25 billion from investors for the Beacon Point development, giving the company serious runway to execute on what is an enormously capital-intensive buildout.
The broader development pipeline now exceeds 9 gigawatts of capacity.
From hash rate to hyperscale
Hut 8 has leaned into this with modular facilities designed to switch between workloads. Hut 8 isn’t alone in this pivot. Core Scientific and Hive Digital are among the peer companies also redirecting resources toward AI and HPC revenues.
What this means for investors
The contracted lease value of $16.8 billion provides a tangible floor for valuation, while the $42.8 billion figure including renewal options represents meaningful long-term upside if tenants extend their commitments.
Execution risk on a development pipeline exceeding 9 gigawatts is non-trivial. Building out that much infrastructure requires navigating permitting, grid interconnection timelines, supply chain constraints for electrical equipment, and construction costs that can escalate quickly.
There’s also the accounting complexity around Hut 8’s retained Bitcoin holdings. The company still holds Bitcoin on its balance sheet, and the mark-to-market volatility of those assets can introduce noise into quarterly earnings that obscures the underlying performance of the AI business.