Hut 8 Corp. (NASDAQ:HUT) is a company that has traditionally focused on cryptocurrency mining. However, it is now making a strategic shift towards AI-driven digital infrastructure. This transition is highlighted by a significant 15-year, $7 billion lease agreement with Fluidstack for 245 megawatts at its River Bend data center. This move is part of Hut 8's broader strategy to capitalize on the growing demand for AI data centers.
The lease agreement with Fluidstack is a major milestone for Hut 8. It includes a 3% annual base rent escalator and could potentially reach a total value of $17.7 billion if all renewal options are exercised. This agreement not only provides a steady stream of income but also positions Hut 8 as a key player in the AI data center market. The annual net operating income from this lease is projected to be $454 million, which is a significant boost to the company's financials.
Google's involvement in the deal adds an extra layer of credibility. As highlighted by the financial backstop provided by Google, this partnership ensures the lease payments and pass-through obligations are met throughout the 15-year term. This backing from a tech giant like Google underscores the strategic importance of the deal and enhances Hut 8's market presence.
The stock price of HUT has responded positively to these developments. Trading at $50.39, the stock has seen a significant increase of 14.21%, or $6.27, following the announcement. The stock has fluctuated between a low of $45.14 and a high of $52.63 today, reflecting investor optimism. With a market capitalization of approximately $5.44 billion and a trading volume of 13.5 million shares, Hut 8 is gaining attention in the market.
Hut 8's collaboration with Fluidstack to construct an AI data center in Louisiana for Anthropic is another strategic move. This project, supported by the $7 billion lease, involves Hut 8 developing and supplying the necessary power to operate the facilities. This initiative further solidifies Hut 8's position in the AI infrastructure space, marking a significant shift from its cryptocurrency mining roots.
