Needham Analyst John Todaro 'Bullish' On Hut 8 Stock

Needham analyst John Todaro has initiated coverage on Hut 8 Corp. HUT with a Buy rating and a price target of $12.00 heading into the Bitcoin halving event. 

The Details:

The analyst highlighted Hut 8's diversification strategy as an important factor ahead of the halving which will reduce the mining rewards by half.  Needham believes diversification will act as a buffer to the reduced mining rewards and noted that Hut 8 operates in five segments: self-hosted mining, managed services, hosting, cloud compute and equipment sales. 

Todaro also pointed to Hut's large bitcoin holdings, second in the industry to only Marathon Digital Holdings MARA. The analyst said that with over 9,000 bitcoin, the strength of Hut's balance sheet is underappreciated by the market. 

The Needham analyst noted Hut lowered costs and improved its fleet operations following its recent merger with US Bitcoin. The merger doubled the company's self-mining hash rate and its monthly bitcoin production. Todaro believes the merger "significantly improved its mining enterprise" and expects further improvements to increase fleet efficiency. 

Todaro also sees Hut moving forward with its plan for data centers for AI-related cloud computing, but believes it is a "down the road" endeavor with significant capital expenditures required to build the segment for the company. 

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HUT Price Action: According to Benzinga Pro, Hut 8 shares are up 5.7% at $7.97 at the time of publication.

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