Core Scientific’s hosting agreements with CoreWeave, a cloud service provider, attracted a lot attention in 2024.
But Hut 8’s plans to lease data center space to its own — for now unknown — AI hyperscaler may put it in an even stronger position than its rival, one analyst argues.
Various bitcoin miners embarked on revenue diversification efforts last year — particularly after last year’s Bitcoin halving. It was also a priority to build out HPC-based verticals that support AI applications.
CORZ shares soared roughly 300% in 2024, after the company emerged from bankruptcy. It was relisted on Nasdaq at the end of January.
A Tuesday research note from Benchmark’s Mark Palmer followed the West Feliciana Parish Planning & Zoning Commission reportedly voting to approve Hut 8’s planned data center construction in Louisiana. Now it seeks approval.
Palmer described the project as one that is likely to succeed. “game-changer” For the Company, please note: “We believe that HUT’s agreement with the unnamed AI hyperscaler could feature better economics on a per [megawatt] basis than CORZ is slated to realize in its deal.”
He explains that the startup CoreWeave was unable to provide CORZ with support necessary to access project financing. The company agreed instead to contribute the bulk of the required capital to complete the project.
Palmer says that Hut 8’s backing by a well-established AI hyperscaler allows it to gain access to the financial market and raise $2.5 billion to fund Phase One of West Feliciana Parish Project.
“The upshot is that HUT wouldn’t face the discount to its economics that CORZ had given CoreWeave’s fronting of the capex for its project,” Then he went on to say:
At 1:45 PM ET Hut 8 stock traded for about $24.85 while CORZ was trading at around $14.20. Hut 8 was up YTD by +17% compared to Core Scientific despite the fact that both companies were trading lower than 6%.
Palmer has set a price of $41 for Hut 8’s stock. As the data center is developed, we will be closely monitoring these shares.
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