Investing.com — Shares of Hut 8 Corp (NASDAQ:HUT) rose 3% after rumors the company won approval to build a 300 MW data center in Louisiana.
Analysts welcomed the approval, which was apparently issued by the West Felician Parish Department of Planning and Zoning on Jan. 6, signaling a potentially significant expansion for the digital asset infrastructure provider.
Cantor analyst Brett Knoblauch suggested the company was in advanced talks with a yet-to-be-named large client, dubbed a “hyperscaler.” Knoblauch maintains an overweight rating on the stock with a price target (PT) of $35.
Similarly, Benchmark’s Mark Palmer emphasized that this development brings Hut 8 a significant step closer to launching a “game-changing” AI data center complex. According to Palmer, the economics of the project could be very favorable for Hut 8, comparing it to a similar contract from Core Scientific.
Investors are drawing parallels between the potential Hut 8 deal and Core Scientific’s 12-year lease of data center capacity from CoreWeave.
Palmer noted, “Investors looking to gauge Hut’s potential progress from the first phase of the project have looked at the economics of Core Scientific’s 12-year deal to lease 500 MW of data center capacity for the AI hyperscaler CoreWeave, in which CORZ is poised to generate revenue of ~$750 million and Ebitda of ~$600M over each contract year.”
He reiterated his Buy rating on Hut 8 with an ambitious PT of $41.
Sentiment among analysts suggests that the hyperscaler deal could offer Hut 8 better economics per MW than those achieved by Core Scientific in its deal with CoreWeave.
The news comes as a positive development for Hut 8, potentially significantly increasing its revenue and Ebitda if the deal closes on favorable terms.
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