Hut 8's (HUT) Tuesday third quarter earnings report showed record revenue and solid profitability, but the stock tumbled nearly 13% after investors were let down by the lack of an AI hyperscaler tenant announcement at its River Bend site in Louisiana, Wall Street broker Benchmark said in a report on Wednesday.
The selloff was “short-sighted and unwarranted,” wrote analyst Mark Palmer, who argued it’s not a matter of if a deal happens, but when. He maintained his buy rating and $78 price target.
Tuesday's plunge in Hut 8 didn't occur in a vacuum, of course. Crypto markets in general suffered one of their worst declines of the year and traditional markets sold off as well, with the Nasdaq shedding 2%. HUT shares, however, were the worst performers in the bitcoin mining/ AI infrastructure space.
HUT is higher by 4% early Wednesday to $50 alongside a modest bounce in markets in general.
Turning back to results and the outlook, Hut 8 CEO Asher Genoot reaffirmed that the 300 megawatt (MW) data center in West Feliciana Parish, which could ultimately scale toward 1 gigawatt (GW), remains on schedule for late 2026, consistent with what Palmer called the company’s “methodical” approach.
Palmer said traders chasing a quick pop missed the bigger story. Hut 8 is positioning itself for long-term value rather than rushing into a suboptimal deal.
With hyperscalers and cloud providers scrambling for power capacity amid the AI boom, Palmer expects River Bend to find a tenant in due time.
Genoot’s comments on the call underscored a leadership team focused on strategic positioning for the next decade, with Hut 8’s sites in Texas, Alberta, and Louisiana forming an integrated platform that can shift between AI, high-performance computing, and bitcoin mining as economics dictate.
Palmer also noted that Genoot addressed the market’s discount on Hut 8’s 1,530 MW power pipeline, saying investors will need to see execution before awarding higher valuations.
Palmer's buy rating and $78 price target is based on a sum-of-the-parts analysis factoring in that development pipeline, Hut 8’s 64% stake in American Bitcoin (ABTC), and the 10,278 bitcoin held as of Sept. 30.
The valuation doesn’t yet include the additional 1,255 MW under exclusivity or 5,865 MW under diligence, leaving further upside potential, the report added.
Read more: Benchmark Sees Hut 8 as Hybrid AI–Bitcoin Power Play, Price Target Doubled to $78
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