Hut 8 (Nasdaq: HUT) Rockets Higher On First Phase Of 352MW Beacon Point AI Deal
The stock is trending, currently trading at $108.63 on the Nasdaq, up over 35% on a volume of over 13 million shares.
Hut 8 announced the commercialization of the first phase of its Beacon Point data center campus in Nueces County, Texas, through a 15-year, $9.8 billion lease (the“Agreement”) for 352 megawatts (MW) of IT capacity (the“Transaction”). The tenant, a high-investment-grade company, will deploy dedicated compute infrastructure at the campus to support AI training and inference workloads at hyperscale.
Beacon Point is the second AI data center campus commercialized under the company's power-first, greenfield development model following River Bend. Hut 8 has executed an interconnection agreement for 1,000 MW of utility capacity, with initial energization expected in Q1 2027. As with River Bend, Hut 8 identified and secured the site through its power-first approach and subsequently commercialized it through a hyperscale AI lease. The Beacon Point transaction brings Hut 8's total contracted AI data center capacity to 597 MW of IT capacity with an aggregate base-term contract value of approximately $16.8 billion and aggregate average annual NOI to approximately $1.1 billion.
Transaction Highlights- Lease Structure: Triple net (NNN) lease. Tenant Profile: Confidential, high-investment-grade company. Compute Architecture: Hut 8 to deliver a 352 MW AI factory designed for NVIDIA's DSX reference architecture for gigawatt-scale AI infrastructure. Base-Term Contract Value: Total contract value of $9.8 billion over a 15-year base lease term, inclusive of a 3.0% annual base rent escalator. NOI Contribution: Expected cumulative NOI contribution of $9.8 billion over the base lease term, translating to an expected average annual NOI contribution of $655 million upon stabilization. Upside Economics: Three 5-year renewal options increase potential contract value to approximately $25.1 billion assuming all three options are exercised. Delivery Timeline: Initial data hall delivery expected in Q3 2027. Project-level Financing: Hut 8 intends to support the development of Beacon Point with project-level financing that aims to optimize cost of capital at the asset level while maintaining disciplined long-term leverage metrics at the corporate level. Campus Scalability: 1,000 MW of utility capacity with initial energization expected in Q1 2027. Commercial Potential: The lease for 352 MW of IT capacity, requiring approximately 500 MW of utility capacity, represents the first phase of commercialization at a campus designed to support up to 1,000 MW of utility capacity, providing significant runway for potential campus expansion and revenue growth.
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