Hut 8, a Bitcoin Miner, Could Pursue the Acquisition of a Hyperscaler, According to Clear Street.

Hut 8’s New Subsidiary Could Shift Focus to Data Centers, Clear Street Projects

Hut 8 Mining (HUT) is poised for a strategic shift, with its new subsidiary, American Bitcoin Corp., potentially being spun off to allow the company to concentrate on its lucrative data center hosting business, according to a report by broker Clear Street on Monday. The partnership between Hut 8 and the Trump family, which involves the creation of American Bitcoin, could see the companies’ operations separated, with Hut 8 focusing on high-margin data center services.

Clear Street emphasized that while American Bitcoin will initially be included in Hut 8’s financial reports, separating the two businesses could unlock more value for shareholders, as Hut 8 expands its data center hosting capabilities. A key part of the company’s growth strategy includes securing additional power capacity and exploring opportunities with hyperscalers, which could provide a major growth catalyst for Hut 8.

American Bitcoin, which will be majority-owned by Hut 8 with a 20% stake held by Eric and Donald Trump Jr., will bring significant mining capabilities to the new venture, with Hut 8 contributing 61,000 mining machines. The new partnership comes at a time when the industry is showing renewed interest in integrating bitcoin mining with cloud computing and artificial intelligence, following similar moves by Core Scientific (CORZ) with CoreWeave.

According to Clear Street’s report, Hut 8 is expected to see robust growth in the second half of the year, largely driven by the activation of its BITMAIN Colocation agreement. Clear Street has a buy rating on Hut 8 shares, setting a price target of $23. The stock saw an early gain of more than 4%, trading at $12.10.

Meanwhile, KBW has also reiterated an outperform rating on Hut 8, raising its price target to $30. KBW highlighted Eric Trump’s role as chief strategy officer for American Bitcoin as a positive development, noting his deep connections within the industry and strong commitment to the sector.