Shares of Hut 8 Corp. (NASDAQ:HUT) climbed 11.5% to $101.99 in afternoon trading on Monday following the announcement of a second artificial intelligence lease valued at $9.8 billion. The Nasdaq Composite was up 0.4% at the time, reflecting broad market strength.
The 15-year lease covers 352 megawatts of IT capacity at the company's Beacon Point campus in Texas. With this agreement, the entire 1,000 MW facility is now fully commercially leased. The tenant remains undisclosed, but the deal brings total leased capacity at the site to 704 MW.
Financial terms of Phase 2 mirror those of the initial Beacon Point Phase 1 lease, which was announced in May 2026. However, the primary focus for this second phase shifts from pricing to delivery, with the first hall expected to begin operations in the second quarter of 2028.
According to Hut 8, approximately 37% of the projected annual net operating income (NOI) from the Beacon Point campus is attributable to Phase 2. The company expects Phase 2 to generate roughly $655 million in NOI per year at full stabilization, matching the Phase 1 projection.
Combined with the previously announced River Bend lease, Hut 8 now has three AI contracts totaling 949 MW of capacity, with a combined base-term value of $26.6 billion and projected annual NOI exceeding $1.75 billion. The unit economics are nearly identical across all three leases, with each contracted megawatt expected to produce about $1.85 million in annual NOI.
The market responded enthusiastically, with Hut 8's market capitalization increasing by approximately $1.17 billion on Monday—roughly 1.8 times the anticipated annual NOI for Phase 2. This valuation metric reflects the intraday equity gain relative to management's NOI target, not a finished asset valuation.
Key operational milestones remain on track. Site preparation is underway, and long-lead equipment has been secured. The initial campus energization is still scheduled for the first quarter of 2027. Notably, Phase 2 does not require additional utility capacity and will implement Nvidia Corp.'s (NASDAQ:NVDA) DSX reference architecture. A revised blueprint has also increased Phase 1 IT capacity by 57% without expanding the physical footprint.
Hut 8 funded Phase 1 using $4.25 billion in fully amortizing, non-recourse notes. The company did not announce a separate financing arrangement for Phase 2 with Monday's disclosure. Chief Executive Asher Genoot characterized the expansion as "the strongest validation an asset can receive," and indicated that Hut 8 intends to replicate this model at other locations.
The lease includes a 3% annual rent escalation. If all optional renewal periods are exercised, the total contract value for Beacon Point could reach $50.2 billion.
In comparison, peer IREN Ltd. (NASDAQ:IREN) jumped 20.3% following its own disclosure of $2.8 billion in AI cloud agreements. Hut 8's gain was more modest than its surge of over 25% after the initial Beacon lease in May. Analyst Nick Giles of B. Riley Securities stated his team would be "strong buyers" of Hut 8 shares. The company is scheduled to report second-quarter earnings on August 4 before the market opens.
Risks to Consider
Phase 2 carries execution risks related to construction, supply chain disruptions, and funding requirements ahead of its 2028 delivery date. The tenant's identity remains undisclosed, and the projected NOI does not account for corporate expenses or depreciation.
