Mark Palmer, an analyst from Benchmark Co., reiterated the Buy rating on Hut 8. The associated price target is $36.00.
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Mark Palmer has given his Buy rating due to a combination of factors surrounding Hut 8’s strategic initiatives and financial positioning. The company is on the verge of executing a carve-out of its bitcoin mining assets through American Bitcoin, which is expected to enhance the valuation of Hut 8 shares. This strategic move is accompanied by the development of new U.S. sites with significant energy capacity, positioning Hut 8 as a major player in AI/HPC workloads and other energy-intensive applications.
Furthermore, Hut 8’s transition to an energy infrastructure focus is expected to lower its cost of capital, making it more appealing to project finance markets. This shift allows Hut 8 to present itself as a stable entity with contracted revenues, rather than one reliant on the volatile bitcoin market. Additionally, the company has substantial liquidity, including cash, bitcoin holdings, and credit facilities, to support its infrastructure expansion. These factors, combined with a favorable valuation analysis, underpin Palmer’s Buy rating and increased price target for Hut 8.