Hut 8 stock banking on shift to AI and Trump-associated crypto split

Bitcoin mining companies are shifting their focus to artificial intelligence (AI) as the profitability of mining diminishes. However, Hut 8, based in Miami, is taking a unique approach by continuing its emphasis on bitcoin mining while also expanding into high-performance computing and AI infrastructure. The company’s current project, the Vega facility in the Texas Panhandle, is a 205-megawatt center that will house both bitcoin mining and AI data center operations.

Hut 8 has articulated its commitment to finding a balance between traditional Bitcoin mining and AI data centers, emphasizing improved energy efficiency and readiness to meet evolving market demands with advancing GPU technology. The expected Q2 launch of the Vega facility is a significant step in this strategic direction.

In a notable move earlier this year, Hut 8 partnered with Eric Trump to establish American Bitcoin Corp., a mining venture majority-owned by Hut 8. This collaboration, aimed at creating a purpose-built platform for low-cost Bitcoin accumulation at scale, is set to go public through a merger with Gryphon Digital Mining. The resulting combined entity, American Bitcoin, is anticipated to trade on the Nasdaq under the ticker ABTC following the Q3 closure of the stock-for-stock transaction.

Hut 8’s latest earnings report detailed a Q1 revenue of $21.8 million and a net loss of $134.3 million, which the company’s CEO, Asher Genoot, described as a deliberate investment phase. The report also highlighted Hut 8’s bitcoin reserve of 10,264 BTC, valued at $847.2 million as of March 31. Analyst Joseph Vafi from Canaccord Genuity endorsed Hut 8 in May, maintaining a Buy rating and a $32 price target for the company. Vafi drew parallels between Hut 8’s American Bitcoin strategy and MicroStrategy’s notable bitcoin accumulation approach under Michael Saylor, viewing the former as a treasury-style play.

Despite a 25.9% year-to-date stock decline, Hut 8 stands at the threshold of transformative growth through its multifaceted strategy encompassing bitcoin mining, AI infrastructure development, and the American Bitcoin venture with Eric Trump. With the Vega facility nearing its operational phase and the upcoming merger set to take American Bitcoin public, Hut 8 is dynamically positioning itself to capitalize on the evolving landscape of both cryptocurrency and AI markets.