HUT: Multi Gigawatt Pipeline Will Drive AI Infrastructure Scale Despite Power Policy Headwinds

Analysts have modestly trimmed their average fair value estimate for Hut 8 to approximately $56 from about $58, even as they lift headline price targets into the $60 to $65 range on expectations that the company will unlock greater value from its multi-gigawatt development pipeline and expanding high performance computing opportunities.

Analyst Commentary

Recent research updates reflect a meaningfully more constructive stance on Hut 8, with multiple firms lifting price targets into the low to mid $60s as they recalibrate assumptions for the company’s high performance computing and power infrastructure platform.

Bullish Takeaways

• Bullish analysts see Hut 8’s multi-gigawatt development pipeline, including 1.6 GW already under development, as a key driver of multiple expansion as the company proves out commercial viability and signs larger contracts into 2026.
• The 8.65 GW broader pipeline, although largely under diligence, is viewed as one of the largest in the peer group and supports a higher long term growth runway in AI oriented data center and GPUaaS demand.
• Rising sector valuations for high performance computing focused operators and robust AI related power demand are prompting upward revisions to Hut 8’s outer year forecasts and justifying target prices that now cluster around $60 to $65.
• Some bullish analysts are incorporating incremental value from Hut 8’s equity stakes and development rights, arguing that the market underestimates the optionality embedded in its power and infrastructure portfolio.

Bearish Takeaways

• More cautious analysts emphasize that a significant portion of Hut 8’s 8.65 GW pipeline remains under diligence, leaving execution risk around permitting, financing, and commercialization timelines that could delay value realization.
• The lack of a substantive update on near term catalysts, such as the Riverbend project, raises questions about pace of execution and the timing of meaningful revenue and cash flow contribution from new sites.
• Despite sector tailwinds, there is concern that former Bitcoin miners, including Hut 8, may face higher financing costs for large scale data center builds until they establish longer operating track records and achieve stronger credit profiles.
• Analysts also note that intensified competition for AI oriented power and data center capacity could compress returns on new projects if Hut 8 is forced to bid aggressively to secure marquee hyperscale or cloud customers.

What's in the News

• British Columbia has proposed new energy rules that would force AI, data centers, and hydrogen-for-export projects to compete in power auctions, while making the existing ban on new cryptocurrency mining connections permanent. This change could constrain power access for operators such as Hut 8 in the province (The Canadian Press).
• The proposed British Columbia framework would prioritize natural resource and manufacturing projects for grid power ahead of AI and data center developments. This could raise uncertainty around long term power availability and pricing for Hut 8’s Canadian growth initiatives (The Canadian Press).
• Hut 8 reported no share repurchases between July 1, 2025 and September 30, 2025, leaving its previously authorized buyback program effectively unused. This may reflect a preference to preserve cash for development projects or management’s current capital allocation priorities (Company filing).

Valuation Changes

• The Fair Value Estimate edged down from approximately $57.87 to about $56.13, indicating a modest reduction in intrinsic value expectations.
• The Discount Rate increased slightly from roughly 8.65 percent to about 8.70 percent, reflecting a marginally higher perceived risk profile or cost of capital.
• Revenue Growth remains effectively unchanged at around 80.24 percent, signaling stable long term top line growth assumptions.
• The Net Profit Margin is essentially flat at roughly 8.89 percent, indicating no meaningful shift in long term profitability expectations.
• The Future P/E has fallen modestly from about 130.6x to roughly 126.9x, suggesting a slightly lower valuation multiple applied to forward earnings.