At the start of 2026, Hut 8 delivered what looked like a disastrous annual report: a full-year net loss of $248 million, with its fourth-quarter loss per share coming in 21 times worse than Wall Street expected. By conventional logic, that kind of performance should have crushed the stock.

But then came the surreal part: all 13 analysts tracking the company rated it a buy, with zero sell calls, and the highest price target went straight to $85.

On one side was a brutal accounting deficit. On the other was a collective celebration by capital markets.

Either the analysts had lost their minds, or this loss-making report was hiding a real money-making trump card.

90% of the $248 Million Loss Was on Paper

The $248 million loss was, in effect, an accounting trick: $220 million of it came from unrealized mark-to-market losses caused by the year-end decline in Bitcoin prices.

In reality, the coins were still on Hut 8’s balance sheet. Their book value had fallen by $220 million, but the company had not lost a dollar of cash.

Once that alarming layer of “paper gains and losses” is stripped away, Hut 8’s operating picture was actually improving.

For full-year 2025, total revenue rose 45%, gross margin climbed from 47% to 54%, and the company held as much as $1.4 billion in cash and Bitcoin reserves. But the surface-level strength was not the whole story.

Fourth-quarter 2025 revenue doubled to $88.5 million, but still missed analysts’ expectations of $97.5 million by 9.24%, prompting Zacks to downgrade the stock.

In short, the business was improving, just not as quickly as expected, while Bitcoin accounting rules made the financial statements look much darker.

So if the quarterly numbers looked this bad, why were so many institutions still quietly turning bullish?

The real trump card was outside the financial statements.

Split Cleanly: Crypto Mining to One Side, AI to the Other

In 2025, Hut 8 pulled off a textbook corporate escape act.

The former crypto mining giant packaged its Bitcoin mining business into a new company called ABTC, listed it independently, and retained an 80% controlling stake. Hut 8 then recast itself, shedding the “miner” label and becoming a pure “AI and energy infrastructure platform.”

The company’s official explanation was that the move would push volatile Bitcoin exposure off its balance sheet and let it earn steadier money from AI data centers.

Its corporate moves and the market’s reaction tell the story best.

To raise money for AI infrastructure, Hut 8 even sold its 310 MW natural gas power plant in Ontario. Wall Street responded enthusiastically to the new “energy infrastructure” narrative.

From 2024 to 2025, institutional ownership of Hut 8 jumped from 55% to 70%.

Large investors no longer treated it as a volatile crypto concept stock. They began allocating to it as a more stable infrastructure asset.

But this was not a perfect ending.

The separation is still incomplete. After ABTC’s listing, its performance remained weak, and Hut 8 still holds an 80% controlling stake. That means ABTC’s weak post-listing performance and loss-making baggage still flow into Hut 8’s financial statements. For example, the net loss attributable to non-controlling interests, meaning ABTC’s 20% public shareholders, was $21.8 million in 2025.

In December 2025, weak market sentiment around ABTC even dragged Hut 8 down 13% in a single day.

Taking off the old “miner” coat is easy. Fully cleaning the mud off the financial statements and becoming a stable seller of water to the AI boom will require Hut 8 to get through the painful transition period after the split.

Google Stands Behind the $7 Billion Contract

After spinning off its crypto mining business, Hut 8 placed its biggest bet on an AI data center, the River Bend project.

It signed a 15-year mega lease with 245 MW of IT capacity and a maximum value of $17.7 billion, including a base value of $7 billion.

The most important detail was not the eye-popping contract value, but the backer behind it: Google provided financial support for the lease, covering all payment obligations over the 15-year base term.

With a tech giant providing the backstop, the project’s risk was instantly reduced to something close to negligible.

Wall Street incumbents including JPMorgan and Goldman Sachs quickly moved in with capital, offering financing at a loan-to-value ratio of up to 85%.

Hut 8 only needs to provide 15% of the equity to lever up an entire billion-dollar-scale project.

Wall Street’s excitement has a financial basis. A single 200 MW-scale hyperscale lease can generate $400 million in annual revenue and more than $200 million in net profit. If River Bend becomes fully operational, the number could be even larger.

River Bend can also add another 1,000 MW of capacity. Under the plan, starting in the second quarter of 2027, Hut 8 will be able to deliver a new center every 60 days.

It is no surprise that Needham’s analysts named Hut 8 their “top pick” for the year.

Beyond that, the company is also holding a total power development pipeline of as much as 8,500 MW, with 1,020 MW currently operational.

As CEO Asher Genoot put it, the company has spent the past two years rebuilding around a “power-first” strategy, and is now finally turning that potential into revenue.

All signs suggest that Hut 8 is transforming from a miner at the mercy of Bitcoin cycles into a new AI infrastructure contender backed by Google and sitting on a vast portfolio of power assets.

However grand the story sounds, Hut 8 still has to cross the hardest stretch: a painful interim window.

On one side, the old business is still bleeding. The aftershocks of the Bitcoin halving remain, crypto mining difficulty is rising exponentially, and whether the spun-out mining business can fund itself is still unknown.

On the other side, the new business cannot solve the near-term cash crunch. The core River Bend data center will not be delivered until the second quarter of 2027.

That gap of more than a year is the most dangerous oxygen-starved zone.

During this period, if demand for AI computing power pulls back, the $1 billion at-the-market offering hanging overhead could be launched at any time, diluting shareholders.

That is why Wall Street short sellers are watching it so closely. About 15% of Hut 8’s free float is currently sold short, a bet that the company will not survive the gap, or that the AI story will fail to materialize.

But Hut 8’s cards are also strong: $1.4 billion in cash and Bitcoin reserves, a Google-backed $7 billion base lease, and real financing support from JPMorgan and Goldman Sachs.

CEO Asher Genoot has set the tone for 2026 in four words: execution and delivery. The grand narrative in the slide deck has already been told.

From here, Wall Street only cares whether Hut 8 can build that data center brick by brick before it burns through the money.