Rosenblatt Securities reiterated a buy rating and a $65 price target on Hut 8 (NASDAQ: HUT) on Thursday following the company’s AI hosting deal with Fluidstack.
Analyst Chris Brendler described the agreement as a “game-changer” that establishes the company as a premier institutional-grade AI infrastructure developer, and the firm raised its long-term estimates to reflect the new revenue stream.
Brendler wrote that the deal “vaults the company to the top of the Bitcoin miner-turned HPC hosting leader board.” The analyst noted that the size, duration, and counterparty quality of the agreement significantly exceed prior expectations, viewing the contract as materially better than comparable deals in the cohort.
The firm raised its 2027 adjusted EBITDA estimate for Hut 8 from $226 million to $343 million. Rosenblatt’s $65 price target is now based on a 17x multiple of that 2027 projection, with Brendler adjusting this down from 19x to account for market conditions.
The analyst highlighted the “impressive” nature of the contract structure compared to peer transactions, as Hut 8 secured the deal without issuing equity or warrants. The report also emphasized the importance of the credit protections included in the agreement.
Hut 8 signed the 15-year, $7 billion agreement with Fluidstack for 245 megawatts of critical IT capacity at its River Bend data center in Louisiana. Including options to expand the contract, the total potential value of the deal is $17.7 billion. The transaction is structured as a triple net lease, which passes almost all direct costs to the tenant.
The agreement also includes a full, 15-year revenue backstop from Google (NASDAQ: GOOG). This provision addresses credit risk and distinguishes the deal from similar transactions that typically carry smaller backstops, Brendler argued, citing this feature as a key differentiator for the company.
The transaction serves as part of a broader infrastructure partnership involving Fluidstack and AI developer Anthropic. Fluidstack holds a Right of First Offer for an additional 1 GW of capacity at the River Bend site. The partnership also includes options for approximately 1 GW of additional capacity across other sites in Hut 8’s development pipeline.
