Hut 8 signed a second $9.8 billion Texas lease, then Keefe Bruyette cut the stock to $92 from $154
Hut 8 fully contracted its 1,000 MW Texas campus with a second $9.8 billion lease on October 30, and Keefe Bruyette cut its price target to $92 from $154 two days later, warning no new leases are coming through early 2027. KBW's valuation warning outweighed the new lease in Monday's session.
Vincent Jiang · 2 min read
On October 30, Hut 8+15.03% — Hut 8, up 15.03 percent today signed the lease Keefe Bruyette said no one would sign for months: a second 15-year, $9.8 billion triple-net lease (a lease where the tenant pays taxes, insurance and maintenance) for 352 MW of IT capacity at its Beacon Point campus in Nueces County, Texas, with the same anonymous high-investment-grade tenant doubling its contracted capacity there to 704 MW 1.
The campus is now fully commercialized against its 1,000 MW AEP Texas interconnection, and Hut 8's portfolio stands at 949 MW of contracted IT capacity, $26.6 billion of base-term contract value and more than $1.75 billion of expected average annual net operating income, all leased to or backstopped by investment-grade counterparties 1. The first Phase 2 data hall is due in Q2 2028 1.
The market answered the lease with a sell-off
Phase 1, announced pre-market the same day, sent the stock up more than 35% intraday 2. Two sessions later, the lease was old news. Keefe Bruyette cut targets across seven bitcoin miners turned AI data-center landlords on November 2, warning of a "lease catalyst drought" through early 2027 3.
The firm said the group trades near or below its estimate of contracted lease value. Hut 8 took a cut to $92 from $154, even as KBW acknowledged the company has closed $7.5 billion of investment-grade project financing behind those 949 MW 4. HUT fell 6.77% that session; KBW's valuation warning outweighed the new lease in Monday's trading 4.
KBW cut every target; Cipher and CleanSpark lost over half
- Target before
- Target after
Data
| Target before | Target after | Change | |
|---|---|---|---|
| Cipher | 28.0$ | 11.0$ | -60.7% |
| CleanSpark | 25.0$ | 11.5$ | -54.0% |
| Riot | 35.0$ | 20.0$ | -42.9% |
| Hut 8 | 154.0$ | 92.0$ | -40.3% |
The cuts hit the names with less paper harder
Cipher Digital+9.99% — Cipher Digital, up 9.99 percent today, a fellow bitcoin miner turned AI landlord that does have leases, still took the steepest cut, 61%, to $11 from $28; CleanSpark+10.63% — CleanSpark, up 10.63 percent today fell 54% to $11.50 with an unsigned Texas lease and a governor-ordered audit of data center grid connections; Riot cut to $20 from $35 with a $573 million bridge loan due December 31 34. Analyst Stephen Glagola also flagged Texas regulatory uncertainty weighing on the group 4.
A signed lease may not buy a premium
The open question is whether the market pays Hut 8 a premium for signed leases its peers lack, or whether the whole group trades at KBW's contracted-lease values regardless 13. Watch Hut 8's project-level financing for Beacon Point Phase 1: it is the next proof the leases convert to cash 13.
Deep dive: our October 30 report, "Hut 8 shareholders carry River Bend's interest and tax bill until the first hall opens in 2027," covers the carrying costs behind these leases.
Get Data Center by email, free
Who is building AI's data centers, and who is paying for them. In our daily email, every weekday.
