According to a report from Clear Street, Hut 8’s (HUT) new subsidiary, American Bitcoin Corp., formed in partnership with the Trump family, may potentially be spun out in order for the company to concentrate on data center hosting. The broker mentioned that although the new unit will be reflected in the financials of the bitcoin miner, there is a possibility for the two businesses to be separated to allow HUT to focus on the more profitable data center hosting revenue stream.
The report also indicated that Hut 8 is anticipated to enhance its power capacity and expand its data center hosting operations. The company’s ability to secure a hyperscaler is seen as a significant catalyst for its growth.
Eric Trump and Donald Trump Jr. are merging their company, American Data Centers, with American Bitcoin, a new mining venture, with the Trump family taking a 20% ownership stake. The majority 80% ownership will remain with Hut 8, which is contributing nearly 61,000 mining machines to the joint venture.
Last year, Core Scientific’s deal with CoreWeave, a cloud computing firm, led to a sector re-rating as investors became more receptive to the idea of bitcoin miners transitioning into artificial intelligence and high-performance computing (HPC).
Hut 8 is forecasted to experience substantial growth, particularly in the second half of the year, driven by the energization of the BITMAIN Colocation agreement, the report mentioned.
Clear Street has issued a buy rating on Hut 8 shares with a target price of $23, while KBW highlighted Eric Trump’s role as the chief strategy officer of American Bitcoin as a positive factor due to his industry commitment and relationships. KBW has an outperform rating on the stock with a $30 price target.
