The stock of Hut 8 (NASDAQ: $HUT) has recently received a new buy rating on Wall Street. Lucid Capital Markets has initiated coverage of Hut 8’s stock with a buy rating and a price target of $226 U.S. This price target is 82% higher than where Hut 8’s stock currently trades, following a remarkable 683% rally over the past year.
Analysts at Lucid Capital are impressed by the progress Hut 8 is making in transitioning from a Bitcoin miner to an artificial intelligence (A.I.) data center landlord. Despite the company remaining unprofitable and posting negative earnings per share of -$2.90 U.S. over the last year, the analysts believe in Hut 8’s growth trajectory in the fast-moving data center space. They expect the company to deliver on the promise of new A.I. sites in the coming years.
The investment case for Hut 8, according to Lucid Capital, is centered on execution at this stage. Hut 8 recently closed a $4.25 billion U.S. bond sale for its Texas data center project. The bonds carry a 6.129% interest rate and mature in 2042. The bond sale attracted $17 billion U.S. in investor orders, indicating strong demand.
The funds raised from the bond sale will be used to develop a 352-megawatt data center in Texas that is being leased to Nvidia (NASDAQ: $NVDA). Hut 8’s stock has gained 143% this year and is currently trading at $124.44 U.S. per share.
In conclusion, Hut 8’s prospects are looking bright as it makes strides in the data center industry and continues to attract investor interest. With a new buy rating and a promising future ahead, Hut 8 is certainly a stock to watch in the coming years.
