Rosenblatt keeps Hut 8 at Buy, sees 23% upside despite ERCOT delay
Rosenblatt Securities kept a Buy rating on Hut 8 (HUT) and a $124 price target, citing 22.6% upside from $101.16. It noted Q2 revenue rose 81% YoY but missed estimates. The firm linked a 10% share drop to ERCOT delaying the Batch Zero transmission-planning study affecting Beacon Point, a 1 GW campus. Rosenblatt cited $26.6B contracted AI data-center revenue and $4.25B notes at 6.129% due 2042.
How this was made
The 30-second read
Why it matters
The core trading takeaway is that the valuation debate is shifting from legacy operations to contracted AI data-center revenue, while ERCOT transmission-planning timing and load classification remain the key uncertainty.
Market read
Analyst reiteration plus project-specific financing and interconnection details may influence how traders price ERCOT-related schedule and credit-risk risk for AI data-center names.
What to watch
The note does not quantify how Base Load vs Studied Load treatment could alter costs, timelines, or curtailment risk, which may dominate near-term valuation sensitivity.
Background
Rosenblatt’s update comes after Hut 8 reported Q2 revenue up 81% YoY but missed estimates, and shares fell 10% on ERCOT Batch Zero delay uncertainty.
Ticker impact
Rosenblatt kept a Buy on Hut 8 and highlighted Beacon Point’s 949 MW contracted AI load amid ERCOT’s delayed Batch Zero study.
Near-term volatility risk remains tied to ERCOT Batch Zero and Beacon Point’s load classification, but the analyst view is supportive.
The article’s actionable new element is the analyst’s maintained Buy and $124 target, plus specific financing and interconnection details that affect perceived project risk.
Market effects
Reinforces the market’s focus on power interconnection timelines and load classification for AI data-center developers.
Highlights Texas ERCOT interconnection backlog and regulatory audit pressure as a key constraint for large new loads.
Limited direct global impact; mainly affects US AI infrastructure supply chain and power-market risk pricing.
Counterpoint
ERCOT’s Batch Zero delay and Beacon Point’s exemption status could still materially change project economics or schedule, making the “limited direct exposure” assumption optimistic.
Key entities
- companyHut 8
NASDAQ-listed AI data-center operator with Beacon Point campus contracted IT load and project financing tied to interconnection milestones.
- regulatorERCOT
Texas grid operator reviewing interconnection requests and putting Batch Zero on hold, affecting transmission-planning for large new loads.
- projectBeacon Point
1 GW Texas data-center campus with 704 MW contracted critical IT load referenced as Hut 8’s main exposure.
- analyst_firmRosenblatt Securities
Maintained Buy rating and $124 price target, citing contracted AI revenue and manageable financing risk.
