Shares of Hut 8 (HUT +5.46%) popped on Monday following positive analyst commentary.
By the close of trading, Hut 8's stock price was up more than 14%.
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Pounding the table on Hut 8
Benchmark analyst Mark Palmer says the artificial intelligence (AI) infrastructure developer's stock is a buy and on its way to $85 per share.
Palmer applauded Hut 8's recently announced deal with fast-growing AI model builder Anthropic. Hut 8 is partnering with cloud service provider Fluidstack to deliver a minimum of 245 megawatts (MWs) of computing power to Anthropic at its data center campus in Louisiana.
NASDAQ: HUT
Key Data Points
As part of the agreement, Fluidstack entered a 15-year, $7 billion lease with Hut 8. With planned expansions and contract renewal options, Hut 8 could deliver up to 2,295 MW of utility capacity. In turn, Palmer notes that the total contract value could reach as high as $17.7 billion.
Solid deal economics
Moreover, Palmer appreciates Hut 8's patience in waiting to procure a deal with superior investment returns. He highlighted the fact that Alphabet's Google is providing a financial backstop that includes lease payments, which helps to reduce counterparty risk and ensure the predictability of Hut 8's cash flows.
