Wall Street is growing more bullish on the artificial intelligence (AI) power supplier.
Shares of Hut 8 (HUT +14.21%) popped on Monday following positive analyst commentary.
By the close of trading, Hut 8’s stock price was up more than 14%.
Image source: Getty Images.
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.
Today’s Change
(14.21%) $6.27
Current Price
$50.39
Key Data Points
Market Cap
$4.8B
Day’s Range
$45.14 – $52.63
52wk Range
$10.04 – $57.29
Volume
14M
Avg Vol
7.8M
Gross Margin
4.92%
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.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.