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Why HUT 8 Stock Is a Sell Even After a 171% Surge in 6 Months
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Key Takeaways
HUT shares surged 171% in six months on power contract visibility, AI data center growth and tech ties.
HUT's earnings are tied to Bitcoin, with Q3 results driven by digital asset gains and a BTC reserve.
HUT trades at a steep premium to peers and faces grid and power limits across its 8.6 GW pipeline.
HUT 8 Corp.’s (HUT - Free Report) shares have soared an impressive 171.4% over the past six months, outperforming the broader Zacks Finance sector’s return of 8.5% and the Zacks Financial Miscellaneous Services industry’s decline of 16%. The stock’s strength has been driven by long-term power contract visibility, the company’s pivot into AI-focused data centers and strategic collaborations with major tech players, including Anthropic and Google.
Relative to digital asset mining and infrastructure peers such as Riot Platforms (RIOT - Free Report) , CleanSpark (CLSK - Free Report) and Marathon Digital (MARA - Free Report) , HUT 8 has delivered stronger performance. During the same time frame, Riot Platforms rose 22.4%, while CleanSpark and Marathon Digital fell 7.9% and 46.8%, respectively.
Despite the recent upswing, fundamental flaws and unfavorable financial indicators suggest a significantly overvalued stock with high downside risk. Let's analyze the key factors.
HUT 6-Month Performance
Image Source: Zacks Investment Research
HUT’s Heavy Bitcoin Dependence Raises Concerns
Hut 8’s earnings profile remains heavily exposed to Bitcoin price movements, making its financial performance inherently volatile. In the third quarter of 2025, a substantial portion of net income and Adjusted EBITDA was driven by gains on digital assets rather than core business operations, highlighting sensitivity to crypto market volatility.
This exposure is further amplified by Hut 8’s strategic Bitcoin reserve. As of Sept. 30, 2025, the company held 13,696 Bitcoin valued at approximately $1.6 billion, positioning Bitcoin as a core balance-sheet asset and a key source of liquidity. While this reserve enhances financing flexibility, it also tightly links Hut 8’s valuation, earnings and cash-flow profile to crypto market volatility.
Moreover, Hut 8 acknowledges structural risks tied to Bitcoin mining economics, including halving events, rising network difficulty and uncertainty around long-term Bitcoin adoption. These factors could pressure mining margins over time, reinforcing concerns that continued reliance on Bitcoin-driven revenues and asset values may weigh on earnings visibility and valuation durability.
HUT Exposed to Long-Term Power and Grid Constraints
Hut 8’s business model is structurally dependent on long-term access to large-scale, reliable power. Converting energy assets into revenues requires sufficient grid availability, timely interconnections and supporting infrastructure readiness. At the industry level, management points to rising electricity demand, ongoing generator retirements and slow transmission expansion as key challenges that could create power supply shortfalls between 2025 and 2029, which will have a direct impact on the speed and certainty of project monetization.
Execution risk is amplified as Hut 8’s development pipeline continues to expand, surpassing 8.6 GW as of Sept. 30, 2025. Advancing projects from diligence to full commercialization relies heavily on utility coordination, permitting approvals and grid reliability across multiple electricity markets, including ERCOT, PJM and MISO. Management acknowledged that power availability remains a defining constraint for energy-intensive applications such as Bitcoin mining and AI data centers, meaning delays or disruptions in grid access could postpone revenue generation and weigh on long-term returns.
HUT’s High Valuation Limits Upside Potential
Hut 8’s stock appears to be overvalued at the moment, limiting its near-term upside and increasing downside risk. The company currently carries a Zacks Value Score of F. In terms of forward price/sales, HUT trades at 14.36x, more than four times the industry average of 3.36x, indicating that the market has high expectations for the company's future.
HUT shares also look expensive compared with its peer group. Riot Platforms, CleanSpark and Marathon Digital trade at valuation multiples of 7.77X, 3.52X and 3.71X, respectively. With high expectations attached to the stock, even a small setback can compress the valuation and weaken the risk-reward balance.
Price/Sales Ratio (F12M)
Image Source: Zacks Investment Research
HUT’s Earnings Estimate Revisions Show a Mixed Trend
HUT’s earnings estimate revisions present a mixed and uneven picture. The Zacks Consensus Estimate for HUT’s first-quarter 2026 loss is currently pegged at 11 cents per share, unchanged over the past 30 days, but an improvement from the 18-cent loss reported in the prior-year quarter.
The Zacks Consensus Estimate for HUT’s 2026 loss is currently pegged at 60 cents per share, which has widened by a couple of cents over the past 30 days and deteriorated sharply year over year, underscoring uncertainty around the company’s path to sustained profitability.
Image Source: Zacks Investment Research
Here’s Why You Should Sell HUT Stock
Despite the sharp rise, HUT 8 remains a high-risk, unattractive investment at current levels. Overreliance on Bitcoin-driven profits, exposure to long-term electricity and grid constraints, and a growing project pipeline all pose implementation risks across revenue visibility. With the stock trading at a significant premium to peers and earnings estimates trending unevenly, upside appears capped. As a result, HUT does not rank as a preferred stock, justifying a sell view.
Image: Bigstock
Why HUT 8 Stock Is a Sell Even After a 171% Surge in 6 Months
Key Takeaways
HUT 8 Corp.’s (HUT - Free Report) shares have soared an impressive 171.4% over the past six months, outperforming the broader Zacks Finance sector’s return of 8.5% and the Zacks Financial Miscellaneous Services industry’s decline of 16%. The stock’s strength has been driven by long-term power contract visibility, the company’s pivot into AI-focused data centers and strategic collaborations with major tech players, including Anthropic and Google.
Relative to digital asset mining and infrastructure peers such as Riot Platforms (RIOT - Free Report) , CleanSpark (CLSK - Free Report) and Marathon Digital (MARA - Free Report) , HUT 8 has delivered stronger performance. During the same time frame, Riot Platforms rose 22.4%, while CleanSpark and Marathon Digital fell 7.9% and 46.8%, respectively.
Despite the recent upswing, fundamental flaws and unfavorable financial indicators suggest a significantly overvalued stock with high downside risk. Let's analyze the key factors.
HUT 6-Month Performance
Image Source: Zacks Investment Research
HUT’s Heavy Bitcoin Dependence Raises Concerns
Hut 8’s earnings profile remains heavily exposed to Bitcoin price movements, making its financial performance inherently volatile. In the third quarter of 2025, a substantial portion of net income and Adjusted EBITDA was driven by gains on digital assets rather than core business operations, highlighting sensitivity to crypto market volatility.
This exposure is further amplified by Hut 8’s strategic Bitcoin reserve. As of Sept. 30, 2025, the company held 13,696 Bitcoin valued at approximately $1.6 billion, positioning Bitcoin as a core balance-sheet asset and a key source of liquidity. While this reserve enhances financing flexibility, it also tightly links Hut 8’s valuation, earnings and cash-flow profile to crypto market volatility.
Moreover, Hut 8 acknowledges structural risks tied to Bitcoin mining economics, including halving events, rising network difficulty and uncertainty around long-term Bitcoin adoption. These factors could pressure mining margins over time, reinforcing concerns that continued reliance on Bitcoin-driven revenues and asset values may weigh on earnings visibility and valuation durability.
HUT Exposed to Long-Term Power and Grid Constraints
Hut 8’s business model is structurally dependent on long-term access to large-scale, reliable power. Converting energy assets into revenues requires sufficient grid availability, timely interconnections and supporting infrastructure readiness. At the industry level, management points to rising electricity demand, ongoing generator retirements and slow transmission expansion as key challenges that could create power supply shortfalls between 2025 and 2029, which will have a direct impact on the speed and certainty of project monetization.
Execution risk is amplified as Hut 8’s development pipeline continues to expand, surpassing 8.6 GW as of Sept. 30, 2025. Advancing projects from diligence to full commercialization relies heavily on utility coordination, permitting approvals and grid reliability across multiple electricity markets, including ERCOT, PJM and MISO. Management acknowledged that power availability remains a defining constraint for energy-intensive applications such as Bitcoin mining and AI data centers, meaning delays or disruptions in grid access could postpone revenue generation and weigh on long-term returns.
HUT’s High Valuation Limits Upside Potential
Hut 8’s stock appears to be overvalued at the moment, limiting its near-term upside and increasing downside risk. The company currently carries a Zacks Value Score of F. In terms of forward price/sales, HUT trades at 14.36x, more than four times the industry average of 3.36x, indicating that the market has high expectations for the company's future.
HUT shares also look expensive compared with its peer group. Riot Platforms, CleanSpark and Marathon Digital trade at valuation multiples of 7.77X, 3.52X and 3.71X, respectively. With high expectations attached to the stock, even a small setback can compress the valuation and weaken the risk-reward balance.
Price/Sales Ratio (F12M)
Image Source: Zacks Investment Research
HUT’s Earnings Estimate Revisions Show a Mixed Trend
HUT’s earnings estimate revisions present a mixed and uneven picture. The Zacks Consensus Estimate for HUT’s first-quarter 2026 loss is currently pegged at 11 cents per share, unchanged over the past 30 days, but an improvement from the 18-cent loss reported in the prior-year quarter.
The Zacks Consensus Estimate for HUT’s 2026 loss is currently pegged at 60 cents per share, which has widened by a couple of cents over the past 30 days and deteriorated sharply year over year, underscoring uncertainty around the company’s path to sustained profitability.
Image Source: Zacks Investment Research
Here’s Why You Should Sell HUT Stock
Despite the sharp rise, HUT 8 remains a high-risk, unattractive investment at current levels. Overreliance on Bitcoin-driven profits, exposure to long-term electricity and grid constraints, and a growing project pipeline all pose implementation risks across revenue visibility. With the stock trading at a significant premium to peers and earnings estimates trending unevenly, upside appears capped. As a result, HUT does not rank as a preferred stock, justifying a sell view.
HUT currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.