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On Tuesday, H.C. Wainwright maintained its Buy rating and $30.00 price target for Hut 8 Mining Corp. (NASDAQ:HUT) shares, currently trading at $14.08, highlighting the company’s proximity to securing a significant high-performance computing/artificial intelligence (HPC/AI) deal. According to InvestingPro data, analysts’ targets range from $30 to $41, suggesting significant upside potential, with the stock currently trading at an attractive P/E ratio of 4.34. Hut 8’s management recently discussed advancing three large-scale AI data center development projects with a combined capacity of over 430 megawatts (MW) during Monday’s earnings call.
The analyst at H.C. Wainwright emphasized Hut 8’s Riverbend project, a 300 MW utility-scale asset in West Feliciana Parish, Louisiana, which has 200 MW dedicated to IT load. The company, which has demonstrated strong revenue growth of 34% in the last twelve months to $162.38 million, plans to construct a tier three data center facility on approximately 600 acres, aiming to lease it to a hyperscale tenant and potentially expand the campus to 1 gigawatt (GW) in the future.
H.C. Wainwright estimates that 200 MW of fully utilized IT capacity at the Riverbend facility could yield around $250 million in annual HPC/AI-related revenues for Hut 8. This potential revenue is not currently included in financial models, as a formal deal announcement has yet to be made. The firm believes that an AI deal of this scale would serve as a major positive catalyst for Hut 8’s stock.
In addition to the anticipated HPC/AI co-location deal, H.C. Wainwright pointed out that investors should also pay attention to the growth inflection in Hut 8’s Bitcoin (BTC) mining operations. The company is on schedule to complete a significant upgrade of its mining fleet this month. The analyst’s bullish stance on Hut 8 is supported by the company’s revamped BTC mining business, the strong possibility of a near-term HPC/AI co-location deal, a large cryptocurrency holding balance, and a robust development pipeline with 2.8 GW of power capacity under exclusivity. InvestingPro analysis indicates the stock is currently undervalued, with a "GOOD" overall financial health score and 10+ additional ProTips available to subscribers. Get access to the comprehensive Pro Research Report for deeper insights into HUT’s valuation and growth prospects.
In other recent news, Hut 8 Corp reported a significant financial performance for Q4 2023, with revenue surging by 69% year-over-year to $162.4 million. The company’s net income also saw a dramatic increase, reaching $331.4 million compared to $21.9 million in the previous year. This robust financial growth reflects Hut 8’s strategic focus on the AI and high-performance computing markets. The company has also seen a rise in institutional ownership, which climbed from 12% to 55%. Additionally, Hut 8 is targeting the energization of its Vega data center by Q2 2025, with an anticipated annualized revenue of approximately $125 million from its Bitmain agreement. The company continues to explore strategic partnerships and financing mechanisms to support its growth initiatives. Furthermore, Hut 8’s strategic Bitcoin reserve stands at 10,171 Bitcoin, valued at $949.5 million, reinforcing its financial position.
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