Roth launches coverage of Hut 8 with a “Buy” rating

Roth Capital Markets is initiating coverage on Hut 8 (Hut 8 Stock Quote, Chart, News, Analysts, Financials NASDAQ:HUT) with a “Buy” rating and target price of $25.00.

Hut 8 is a digital infrastructure company that focuses on acquiring and using power for Bitcoin mining and high-performance computing, including AI. Formed in November 2024 through a merger with U.S. Data Mining Group, it operates about 1,020MW across 15 sites in the U.S. and Canada. HUT takes a power-first approach, using its energy expertise to develop and run infrastructure for both its own use and third parties.

Roth analyst Darren Aftahi said in his June 5 note on the stock that the rating and price target reflect HUT’s transformation into a power-focused digital infrastructure platform with significant growth potential. The company has 1.0 GW of capacity online and 2.6 GW under exclusivity, along with strong long-term visibility from both Bitcoin hosting and high-margin HPC colocation. Its three HPC sites are well-positioned to benefit from rising AI demand, and the carve-out of its Bitcoin operations further enhances offtake visibility.

Together, these factors support margin expansion and a potential re-rating, provided successful execution is achieved.

“HUT sources and allocates power to the highest-return use cases (BTC, HPC, AI Cloud),” Aftahi said. “This enables strategic site selection, efficient capex ($400K/MW BTC builds), and faster speed-to-market. Its in-house design and energy optimization software allows cost control and scalability that peers often lack. ~430MW of HPC CITL and other sites in diligence support a highly scalable roadmap.”

Aftahi said a financial turnaround is expected to begin in the second half of 2025, with scaling in 2026 and beyond. He forecasts $187-million in revenue for fiscal 2025, up 15% year-over-year, but sees most of the growth coming in 2026 as ABTC and HPC power ramp up, boosting visibility and margins.

“In FY26, we model for ~87% y/y revenue growth as normalized AEBITDA margins approach 40%,” Aftahi said. “In FY27, we model for ~100%+ y/y revenue growth as AEBITDA margins approach 50%. We expect this to be driven by the scaling of ABTC offtake agreements and the addition of future HPC hosting agreements (none currently).”

He said demand for AI and HPC infrastructure is creating a multi-year tailwind, with global AI infrastructure spending projected to grow fivefold to about $399-billion by 2028, according to Bloomberg Intelligence. U.S. data center IT load is also expected to more than double.

“HUT’s 10GW power pipeline, including near-term deliverability of ~430MW CITL, positions it to serve this demand across hyperscaler, neocloud, and/or enterprise workloads,” Aftahi said. “As HUT transitions to an infrastructure-first model with long-duration contracts and investment-grade counterparties, we see a clear path to sustained cash flow and multiple expansion.”

Aftahi expects Hut 8 to post an Adjusted EBITDA loss of $87.3-million on revenue of $ 187.5 million in fiscal 2025. He forecasts those figures to improve to $113.3-million in EBITDA on $351.2-million in revenue in fiscal 2026.

As for the decision to initiate coverage with a “Buy” rating and a $25 price target, the analyst said that multiple expansion depends on the successful execution of HPC. HUT currently trades at about 7x estimated 2026 Adjusted EBITDA, below the peer median and well under the 13x peer average.

“We believe HUT warrants a slight premium to peers given its strategic shift to focus on recurring digital infrastructure revenues,” he said. “As such, our $25 PT is based on a 15x EV/AEBITDA (’ 26) multiple. We see execution on a large-scale HPC offtake as the key catalyst to unlock multiple expansions and reposition HUT as a hybrid infrastructure platform, although requiring significant additional CapEx.”

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