Hut 8’s New Partnership with Trump Family Could Propel Data Center Focus, Clear Street Predicts

Hut 8 Mining (HUT) is set to possibly spin off its newly formed subsidiary, American Bitcoin Corp., to streamline its operations and pivot towards its high-margin data center hosting business, according to a recent report by Clear Street. The partnership, involving Hut 8 and the Trump family, could lead to a separation of the businesses, allowing Hut 8 to concentrate on expanding its data center capabilities while maintaining its stake in the mining sector.

Clear Street noted that the new subsidiary, though initially included in Hut 8’s financials, could eventually operate independently, enhancing Hut 8’s ability to scale up its data center hosting services. This shift would allow the company to explore hyperscaler partnerships—large-scale data infrastructure players—which could significantly contribute to future growth.

The American Bitcoin venture, a collaboration between the Trump family and Hut 8, will see Hut 8 holding an 80% stake in the new mining entity, contributing approximately 61,000 mining rigs. Eric Trump and Donald Trump Jr. are taking a 20% share in the company through their firm, American Data Centers, which aims to build out mining infrastructure. The move follows similar shifts in the sector, such as Core Scientific’s (CORZ) alliance with CoreWeave to integrate bitcoin mining with high-performance computing and AI applications.

Clear Street’s report also highlights that Hut 8 is poised to experience substantial growth in the latter half of the year, driven by the energization of its BITMAIN Colocation agreement. Clear Street has maintained a buy rating on Hut 8 with a $23 price target. Early market reactions saw Hut 8 shares rising over 4%, reaching $12.10.

Additionally, investment bank KBW has also shown confidence in Hut 8, giving the stock an outperform rating and setting a price target of $30. KBW’s analysts pointed to Eric Trump’s involvement as Chief Strategy Officer of American Bitcoin as a strong positive, given his significant industry ties and deep commitment to the sector.