Hut 8 Surges 11.97% on $7B AI Data Center Lease with Google Backstop – What’s Next?

Summary
• Hut 8 (HUT) rockets 11.97% to $44.97, surging from a $42.53 open amid a $7.0 billion AI infrastructure lease.
• Google backs the 15-year deal, covering obligations and enabling $17.7 billion in potential value with renewal options.
• Entergy, J.P. Morgan, and Goldman Sachs join as blue-chip partners to de-risk execution and fund 85% of project costs.
• The stock trades at a 68x dynamic P/E, reflecting optimism in its transition from Bitcoin mining to AI infrastructure.

Hut 8’s dramatic intraday rally is fueled by a landmark 15-year, $7.0 billion AI data center lease with Fluidstack, backed by Google’s financial guarantees. The deal, coupled with institutional-grade execution partners, signals a strategic pivot to high-margin AI infrastructure. With a 12.5% surge in turnover and a 11.97% price jump, investors are betting on Hut 8’s ability to capitalize on the AI boom while mitigating execution risks through its blue-chip consortium.
Landmark AI Infrastructure Deal Ignites Investor Optimism
Hut 8’s explosive 11.97% rally stems from its $7.0 billion, 15-year lease for a 245 MW AI data center in Louisiana, backed by Google’s financial guarantees. The deal, structured as a triple-net lease with a 3% annual rent escalator, includes three 5-year renewal options that could push total value to $17.7 billion. Google’s backstop covers lease payments and pass-through obligations, while J.P. Morgan and Goldman Sachs are expected to fund 85% of the project’s costs. This institutional-grade execution model, involving Entergy, Vertiv, and Jacobs, de-risks construction and operational timelines, addressing investor concerns about project delivery. The lease’s $454 million annual net operating income (NOI) contribution and potential for 1,000 MW expansion further validate Hut 8’s pivot from Bitcoin mining to AI infrastructure, aligning with the sector’s long-term growth trajectory.

Data Processing Sector Gains Momentum as Hut 8 Leads Charge
The Data Processing & Outsourced Services sector, led by Equinix (EQIX) with a 0.41% intraday gain, reflects broader optimism in AI infrastructure demand. However, Hut 8’s 11.97% surge far outpaces sector peers, driven by its unique triple-net lease structure and Google’s financial backstop. While EQIX’s modest rise underscores market validation of AI infrastructure trends, Hut 8’s deal stands out for its institutional-grade execution model and potential $17.7 billion in contract value. This divergence highlights Hut 8’s strategic differentiation through blue-chip partnerships and de-risked project timelines, positioning it as a sector bellwether.

Options and ETFs to Capitalize on AI Infrastructure Momentum
• 200-day average: $25.93 (well below current price)
• RSI: 46.91 (neutral, suggesting potential for further upside)
• MACD: -0.56 (bearish short-term) vs. signal line -0.24 (mixed)
• Bollinger Bands: Price at $44.97, near upper band ($48.32), indicating overbought conditions
• K-line pattern: Short-term bearish trend, long-term bullish

Hut 8’s technicals suggest a volatile but bullish setup, with the stock trading near its 52-week high of $57.29. The 44.97 level is critical, as a break above the intraday high of $45.56 could trigger a retest of the 52W high. For leveraged exposure, the Schwab Crypto Thematic ETF (STCE), up 4.7%, and VanEck Digital Transformation ETF (DAPP), up 3.98%, offer thematic alignment with AI and crypto infrastructure. However, options present higher-conviction opportunities.

Top Option 1: HUT20251226C42
• Code: HUT20251226C42
• Type: Call
• Strike Price: $42
• Expiration: 2025-12-26
• IV Ratio: 171.53% (high volatility)
• Leverage Ratio: 8.43%
• Delta: 0.5898 (moderate sensitivity)
• Theta: -0.343955 (rapid time decay)
• Gamma: 0.033555 (moderate sensitivity to price changes)
• Turnover: 17,510 (high liquidity)
• Payoff (5% upside): $47.22 → $5.22 gain per contract
• Why: High IV and leverage make this call ideal for a short-term bullish bet, with liquidity ensuring easy entry/exit.

Top Option 2: HUT20251226C43
• Code: HUT20251226C43
• Type: Call
• Strike Price: $43
• Expiration: 2025-12-26
• IV Ratio: 154.13% (high volatility)
• Leverage Ratio: 10.32%
• Delta: 0.5504 (moderate sensitivity)
• Theta: -0.319058 (rapid time decay)
• Gamma: 0.038013 (moderate sensitivity to price changes)
• Turnover: 14,501 (high liquidity)
• Payoff (5% upside): $47.22 → $4.22 gain per contract
• Why: Slightly out-of-the-money but with strong IV and leverage, this call offers a balance of risk and reward for a continuation of the bullish trend.

Aggressive bulls should consider HUT20251226C42 into a break above $45.56.

Backtest Hut 8 Stock Performance
The backtest of the HUT ETF after an intraday surge of at least 12% from 2022 to the present shows promising results, with win rates and returns indicating the strategy's effectiveness:1. Frequency and Win Rates: The event occurred 466 times, with a 3-day win rate of 53.00%, a 10-day win rate of 57.73%, and a 30-day win rate of 59.87%. This suggests that the HUT ETF tends to experience positive returns in the short term following the 12% intraday surge.2. Returns: The average 3-day return following the event was 1.24%, with a maximum return of 17.25% on day 59. The 10-day return was higher at 4.03%, with a maximum return of 21.76% on day 64. The 30-day return was 9.86%, with a maximum return of 24.56% on day 79. These returns indicate that while there is some volatility, the HUT ETF can experience significant gains in the month following the 12% intraday surge.3. Max Return: The maximum return during the backtest period was 24.56%, which occurred on day 79, suggesting that the strategy has the potential to capture substantial gains if held for a longer period.

Hut 8’s AI Infrastructure Play: A High-Velocity Trade with Long-Term Potential
Hut 8’s 11.97% surge is a testament to the market’s validation of its AI infrastructure pivot, underpinned by Google’s financial backstop and institutional-grade execution partners. While the stock’s short-term technicals remain mixed (MACD bearish, RSI neutral), the long-term bullish trend and proximity to the 52-week high suggest further upside if the $45.56 intraday high is sustained. Investors should monitor the 44.97 support level and watch for a breakout above $48.32 (Bollinger upper band) to confirm momentum. The sector leader, Equinix (EQIX), up 0.41%, reinforces the broader AI infrastructure narrative. For those seeking conviction, the HUT20251226C42 call option offers a high-leverage, high-liquidity play on a continued rally. Act now: Target $45.56 breakout or retest of the 52-week high.