Hut 8 Corp (TSX:HUT)(NASDAQ:HUT) has executed a decisive strategic shift by securing a 15-year lease valued at $7 billion with AI cloud provider Fluidstack, a deal backstopped by Google that cements its transition into a high-performance computing powerhouse.
This agreement for the River Bend data center in Louisiana not only promises substantial long-term revenue but also leverages 245 megawatts of capacity to address the critical power shortages facing the artificial intelligence sector.
The partnership with Fluidstack and AI developer Anthropic allows Hut 8 to utilize its massive power pipeline which totals more than 10 gigawatts across various stages of development. The base value of the deal stands at $7 billion but holds the potential to swell to $17.7 billion if all expansion options are exercised.
While the pivot is promising, investors should remain aware that Hut 8 retains exposure to the volatile cryptocurrency market through its bitcoin reserves. The stock may still experience price swings correlated with digital assets despite the new focus. However, the projected $454 million in annual net operating income expected once the first halls come online in 2027 offers a stable earnings baseline compared to pure play mining.
Hut 8 may be a suitable investment for growth investors seeking entry into the AI infrastructure boom or those comfortable with the volatility inherent in the evolving digital asset landscape. It's a risky play but it can take off due to soaring demand for all things related to AI. The stock has more than doubled since the start of the year and now has a market cap of around $5 billion.
