Hut 8 shares surge nearly 12% on $9.8B AI data center lease for Beacon Point Phase 2

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HUT +7.98%

Hut 8 Mining Corp (TSX:HUT, Unlisted (US):HUTMF) shares climbed nearly 12% on Monday after the company announced a second long-term lease agreement for its Beacon Point AI data center campus in Texas, fully commercializing the 1-gigawatt facility and increasing its contracted data center portfolio.

Key Details of the Lease Agreement

• Duration: 15-year lease agreement
• Capacity: 352 megawatts (MW) of IT capacity
• Tenant: Same high-investment-grade tenant that signed the first phase lease at the campus
• Base-term contract value: $9.8 billion
• Total contracted capacity at Beacon Point: 704 MW (both phases)

Portfolio Impact

With this transaction, Hut 8's total contracted AI data center capacity rises to 949 MW across its portfolio, supported by 1,330 MW of utility capacity. The company reported:

• Aggregate base-term contract value: $26.6 billion
• Average annual net operating income (NOI): more than $1.75 billion across its contracted AI data center assets

Beacon Point Campus Overview

• Location: Nueces County, Texas
• Utility interconnection: 1,000 MW agreement with AEP Texas
• Status: Fully commercialized, with the full 1,000 MW capacity now contracted under two 15-year agreements

Phase 2 Development

The second phase lease will support the development of another 352 MW AI factory designed around Nvidia's DSX reference architecture for large-scale AI infrastructure. Initial Phase 2 data hall delivery is expected in the second quarter of 2028.

Financial Expectations

• Second lease contribution: $9.8 billion in cumulative net operating income over the base term, or approximately $655 million annually once stabilized
• Full Beacon Point campus: Expected to generate $1.31 billion in average annual NOI
• Renewal options: Three five-year renewal options under each lease could increase potential campus-level contract value to $50.2 billion if fully exercised

CEO Commentary

"The real test of our power-first approach is what our partners are willing to commit against it. Our tenant at Beacon Point chose to double its footprint at the site, the strongest validation an asset can receive. We took this greenfield site from first lease to full commercialization in just months. That speaks to the quality of the sites we originate, the credibility of our delivery, and the long-term orientation of our partnerships. The opportunity ahead of us is to apply the same model across our development pipeline."

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— Asher Genoot, CEO of Hut 8

Development Approach

Hut 8 highlighted its "power-first" development approach, which involves securing energy capacity before building data center infrastructure. The Beacon Point project was initially developed around speed-to-power opportunities before being converted into a fully contracted AI data center campus.

Construction Timeline

• Construction activity is underway at the site
• Long-lead equipment has been procured
• Initial energization is still expected in the first quarter of 2027