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Core Scientific made headlines in 2024 due to its hosting agreements with cloud provider CoreWeave.
However, Hut 8’s announcement of leasing data center space to an undisclosed AI hyperscaler could position it even more strongly than its competitor, according to an analyst.
Following the Bitcoin halving last year, several bitcoin miners focused on diversifying their revenue streams, with a particular emphasis on expanding into high-performance computing (HPC) to support AI applications.
After emerging from bankruptcy and relisting on the Nasdaq last January, CORZ stock experienced a surge of approximately 300% in 2024.
A recent research note by Benchmark’s Mark Palmer highlighted that the West Feliciana Parish Planning & Zoning Commission had reportedly approved Hut 8’s proposed data center construction in Louisiana, pending final approval. Palmer believes this project could be a significant game-changer for the company, stating that Hut 8’s agreement with the unnamed AI hyperscaler may offer more favorable economics compared to CORZ’s deal.
The analyst explained that CoreWeave’s lack of financial support hindered CORZ’s ability to access project finance, leading CoreWeave to provide most of the capital for the project. In contrast, Hut 8’s partnership with a well-established AI hyperscaler allows it to tap into the finance market to secure the $2.5 billion investment required for Phase One of the West Feliciana Parish project.
Palmer emphasized that Hut 8 would not face the same economic challenges as CORZ due to the backing of a reputable AI hyperscaler, which eliminates the need for discounts on project economics.
As of 1:45 pm ET, Hut 8’s shares were trading at approximately $24.85, while CORZ stock was valued at around $14.20. Despite both stocks experiencing a more than 6% decline on that day, Hut 8 had a year-to-date stock price gain of 17%, outperforming Core Scientific’s -1% performance.
Palmer set a price target of $41 for Hut 8 stock, indicating that investors should closely monitor the company’s progress on the data center project.