Key insights
- Hut 8 signed a $9.8B lease for an AI data center in Texas, signaling strong demand for AI infrastructure. The deal, leveraging NVIDIA's architecture and involving Vertiv and Jacobs, highlights growth in AI-related sectors. AEP's involvement in providing utility capacity further underscores the infrastructure build-out supporting AI expansion, potentially boosting related equities.
MIAMI - Hut 8 Corp. (NASDAQ:HUT) (TSX:HUT) announced today a 15-year lease agreement valued at $9.8 billion for 352 megawatts of IT capacity at its Beacon Point data center campus in Nueces County, Texas, according to a press release statement.
The triple-net lease with an undisclosed high-investment-grade tenant covers AI training and inference workloads. The agreement includes three 5-year renewal options that could increase the total contract value to approximately $25.1 billion if exercised.
The transaction brings Hut 8’s total contracted AI data center capacity to 597 MW with aggregate base-term contract value of approximately $16.8 billion. The company expects the Beacon Point lease to contribute cumulative net operating income of $9.8 billion over the base lease term, translating to an average annual NOI contribution of $655 million upon stabilization.
Hut 8 has executed an interconnection agreement for 1,000 MW of utility capacity at the site with AEP Texas, a subsidiary of American Electric Power (NASDAQ:AEP). The $74.3 billion utility company has maintained dividend payments for 56 consecutive years and currently trades near its 52-week high of $139.44, according to InvestingPro data. Initial energization is expected in the first quarter of 2027, with initial data hall delivery scheduled for the third quarter of 2027.Want deeper insights? InvestingPro offers access to exclusive ProTips, Fair Value estimates, and comprehensive financial health scores for AEP and over 1,400 US stocks.
The 352 MW AI facility will be designed to NVIDIA’s DSX reference architecture for gigawatt-scale AI infrastructure. Hut 8 is working with Vertiv Holdings Co (NYSE:VRT) and Jacobs (NYSE:J) on the project’s development and construction.
The lease agreement includes a 3.0% annual base rent escalator. Hut 8 plans to support the development with project-level financing.
The 352 MW lease represents the first phase of commercialization at the campus, which is designed to support up to 1,000 MW of utility capacity. The transaction advances 500 MW of utility capacity from Energy Capacity Under Development to Energy Capacity Under Construction status.
Hut 8 operates as an energy infrastructure platform focused on AI, high-performance computing, and ASIC compute applications.
In other recent news, American Electric Power reported robust first-quarter 2026 financial results, with earnings per share reaching $1.64, surpassing the projected $1.57. The company’s revenue also exceeded expectations, coming in at $6.02 billion compared to the anticipated $5.65 billion. These results have been a focal point for investors, highlighting the company’s financial health. Additionally, Scotiabank has increased its price target for American Electric Power to $140 from $131, maintaining a Sector Perform rating. This adjustment follows the company’s announcement of new capital projects totaling $6 billion, which marks an 8% increase in its capital expenditure plan. Scotiabank pointed to the company’s enhanced earnings growth outlook, now projected at a compound annual growth rate of over 9%. These developments underscore American Electric Power’s strategic initiatives and financial performance, drawing attention from analysts and investors alike.
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