Monster AI Data Center Deals: IREN, HUT, SLNH, RIOT & BTBT!

AI demand is hitting real-world GPU limits, and the market is finally pricing AI data centers like contracted infrastructure instead of a speculative pivot from mining. We break down the monster Hut 8 and Iren updates, the new analyst targets, and the governance and risk details that can make or break returns.

• Bitcoin and Ethereum rebound and why that mood shift matters for the sector
• Bit Digital NAV discount and how treasury assets can drive value debates
• MicroStrategy dividend runway and the role of USD reserves
• Kimi K3 launch and what a GPU capacity pause signals about AI adoption
• AI infrastructure stocks snap back after a sharp pullback and what to watch next
• DMG strategic investments in applied AI plus options and RSU incentives
• IREN RSU controversy and a shareholder letter pushing for stronger guardrails
• Soluna momentum from the Cody 2 LOI and a new $4 coverage initiation
• Hut 8 Beacon Point 1GW campus economics and what the lease implies for valuation
• Iren’s $2.8B contract win, ARR raise, and the importance of customer prepayments
• Why co-location risk differs from GPU performance risk in AI contracts

Let us know in the comment section below what you thought about today's news from IREN & HUT!

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Transcript

Welcome And What’s Driving Today

SPEAKER_01 0:00

Hey guys, welcome or welcome back to the channel McNally Money, the official home of power analysis. A huge episode to kick off the week for you with another big deal signed out from Iron and HUD 8, not to mention a number of new price targets we wanted to dissect in today's video. Before we get into it, you know the routine. Take a second, smash the like button, guys. Big help to myself and the channel. Anthony absolutely loves it. If you're not already subscribed, McNally Money, feel free to join. And let us know in the comment section below what you thought about today's news from Iron and Hutt and your top pick between the two. With that being said, let's get into today's video. All right, guys, away we go. Monday afternoon, second podcast of the day. We just got off our power play weekly update there, Anthony. Both taking advantage in a big way of the pullback we've seen over the last couple weeks in the space. Make sure you check it out if you want to see our live trades. However, quite a different tune this week. We've got some massive deals kicking off Monday morning. We've got some new price targets and some big, much needed life in the sector. We're going to be covering all of that and more before we do. Bitcoin, Ethereum also helping

Bitcoin And Ethereum Wake Up

SPEAKER_01 1:18

us out. Both of us, uh, to our surprise this morning, noticing Bitcoin up nearing 66,000.

SPEAKER_00 1:25

Yeah, nice, uh, a nice little uh rise today. Uh over the weekend, it had brought that to 63 and 64,000, respectively. Um, but yeah, hopefully we can we can sort of like keep up the 65,000 threshold now and and just gradually um start our move upwards. But uh yeah, we'll take we'll take a nice green day like this.

SPEAKER_01 1:46

For sure. And Ethereum, we haven't updated them in a while. They're getting close to that ever-important 2,000 US milestone. We know Bit Digital has a significant portion of their balance sheet in Ethereum. So we figured we'd throw a shout out there, jump over to their homepage, Anthony.

Bit Digital NAV Discount Opportunity

SPEAKER_01 2:04

The nav still trading at a 40% discount. This is one you and I have been scratching our heads. White fiber, significant shareholder there. Ethereum, we would expect to rebound with Bitcoin. This could be presenting some opportunity.

SPEAKER_00 2:19

Yeah, absolutely. Um, you know, 40% discount. The net asset value of the stock at the moment, $2.63. So for every dollar you're investing in the company, you're getting physical assets worth $2.63, of which the majority is that share of the white fibre, they've got 70% of the shares, and that $162,000 Ethereum held in the Treasury, which at today's price now has got a valuation of $310 million. Add those two together, you get to over a billion and eighty million dollars. And uh, you know, if you look at uh the market capitalization today, it's uh it's a significant um amount lower than that. So um, yeah, it's uh it's it's uh it's interesting. You know, the market's just not giving uh Bit Digital that love at the moment, but maybe if people start to understand and do the research and and look at this, this could be an opportunity for people to look at as a value stock, maybe.

SPEAKER_01 3:15

And you can see how quickly these companies can turn. We'll come on to that in a second.

MicroStrategy Dividend Runway Strategy

SPEAKER_01 3:20

Uh Michael Saylor again this week not leveraging the stretch preferred. He was actually selling shares of MSTR on the open market. And once again, Anthony, adding to that cash position, further extending the dividend runway.

SPEAKER_00 3:36

Yeah, he's building a USD reserve, and and uh last week I think we reported it was close to three billion dollars. It's now at $3.2 billion. Remember, he's got to make these uh payments on the on the dividend at the moment. The yield on that dividend is 13.5 percent. Now, with that 3.2 billion, I think we quoted last week at 3 billion, enough for 20 uh months of interest payments. So you're getting closer now to maybe two years. So he's he's obviously taking this into context now. Um, I mean, one thing, you know, we'd be happy that the Bitcoin price is starting to rise. As that starts to rise, it creates that valuation of the of the Bitcoin reserve there. Um, but he's making sure that he's got enough to pay the interest. It looks like um, you know, strategy and strive of all the sort of dats out there sort of you know have have a you know a strategy to to get them through this period. Um, it's been a challenge for a lot of these companies. They all sort of sprung up about 18 months ago, believing that they could just put Bitcoin in their treasury and everything would be fine, and they were buying Bitcoin all the way up to 126,000. Well, when it's at 60,000 and you've been paying $100,000 a coin for it, that's a that's a challenge on the value of the company. And um, we've seen a lot of companies with some big, big names out there, certainly in in the social media space, who've who've aligned their names to companies to do this, and they've had a bit of a bit of a challenging period, but uh strategy the biggest holder of Bitcoin of any company or any institution in the world, edging towards that one million coins, uh just making sure that they've got the right amount of of reserves to pay that uh that dividend on a regular basis.

SPEAKER_01 5:24

Yeah, you're right about that. Now we've covered Bitcoin, Ethereum.

Kimi K3 Shows GPU Demand Crunch

SPEAKER_01 5:28

I want to shift over to AI. Another macro update that came out late last night, Anthony. The introduction of Kimi AI's K3 model. So this is a customer-facing, think of a Claude, an anthropic, uh, where you'd actually interact with the AI agent. They promised a great model, very competitive pricing, obviously, a lot of GPU capacity to support those promises. They've launched this new model and within 48 hours already come into some significant headwinds here. They've got to slow down actually or pause new subscriptions. They're saying their GPUs are at max capacity. Yet again, we're seeing the demand for AI and this adoption curve we're seeing on a daily basis uh seems to be relentless.

SPEAKER_00 6:16

Yeah, it was only launched on July 16th, and literally on the 19th, they're now going to stop verbal subscribers, um, which is you know uh interesting. I mean, obviously it's Chinese. Um, you're gonna have to learn to get enough compute power out there to deliver your service. It sounds like, from what I'm hearing, it's an extremely good um uh AI package. It it's sort of it's certainly not top tier when you compare it to um other um AI packages that are available out there. There's only a couple that sort of uh at the moment seem to exceed this. So you can understand why that capacity grew very quickly. But you know, it's like uh companies when they when they have a good idea, you've got to remember about supply and demand and being able to meet the demand uh with supply, and and this is the challenge. They're gonna have to go back to the drawing boards now and work out how they're gonna raise capital to A by compute power, buy GPUs, etc., to deliver this out in the future to a bigger audience than they've got at the moment. But um, hats off that they they you know they within 48 hours of launch, um, they they got a massive sign up from a load of um uh potential customers.

SPEAKER_01 7:26

And this really goes back to the tokenization shift we're seeing rather than a Netflix style subscription where you get as much as you want for X amount a month, more of a utility bill now, and you actually pay for usage. So it'll be interesting to see how these companies, specifically trying to compete on price, navigate that transition to tokenization.

AI Infrastructure Stocks Bounce Back

SPEAKER_01 7:47

Now, moving over to the AI infrastructure players here, Anthony, I mentioned very welcome relief in the sector. I think we are down 30% or so over the last couple of weeks. Today, many of these companies making up significant ground. You'll see Iron, Saluna, HUD 8. We're gonna talk about specifically, but really uh strong list across the board.

SPEAKER_00 8:09

Yeah, we have we have some um big news out this morning. We'll cover that later on the podcast, and that's probably given that the the shares a bit of a shift. Soluna leading the way there at 23 uh percent there, and we'll cover a probably a good reason why that stock price is up there. Um, but again, you know, um be very, very careful. These stocks came down massively from the sort of like say the middle of June, 22nd of June. I looked at the prices there and looked at the prices recently, and there was like a 30-40 percent drop in some of these stocks. And if you go to the 52-week range, remember it wasn't too many months ago that we were saying there were six or seven companies that are at their 52-week high. I'm looking at the 52-week range now, and the one that's closest to its 52-week high is actually HUT, but it still needs to get a further $40 from where it is at the moment to achieve that. So, you know, that's that's the difference. It's if it's down $40 or $50 from this morning, um, that's effectively down 45% uh since that uh 52-week high. Um, and a lot of these stocks have dropped a lot, but we'll take the green day today. There's so many of the stocks, half the tables in double digits, everything's green. Um, DMG, um, the only one that's booking the trend, and they're not even in the red, they're up there sort of like um at their sort of like 49 cents um Canadian cents uh stock price there, still showing that 101 million dollar market capitalization. Uh, they've got an LOI for 50 megawatts at uh at their site in in your neck of the woods, Bryce. Um, so you know, we'll take the green days all all day along. Uh, just moving over to the heat map. Um, again, we'll see today. Obviously, it's a very nice green green day there. DMG showing on mine. I've got the USD price on mine just showing up like 1% down, but we'll sort of like uh 1% and 0%. It could be fractions of a of a percentage there. A bit of green showing up on the five-day change, and we were saying this morning, um, even though stocks were up well today, they were still having to find um a gap to get back to where they were just last week. And if you look at Wi-Fi, up 13% today, people say that's brilliant, but on the five-day, they're still down 22%. On the one-month change, they're down 36%. So, if you look at the one-month change for all these stocks, bear in mind the average increase today is 10%. They're still down 24% on the one-month change. Uh, year today and one-year change, predominantly green across the board, with the exception of a couple of the pure play companies out there. Really, the market's looking at um uh the HPC contracted uh deals that are coming out fast and furious at the moment. Um, and so you know, with Bitcoin price still sort of in that mid 60,000 range, if Bitcoin price starts to rise, then you're going to see uh the likes of uh ABTC and you're gonna see the likes of um Bit Digital because the Ethereum price will generally follow uh Bitcoin price, they're very much sort of interlinked. Then if you talk about uh you know the Bitcoin price, you can see um Bitcoin um uh priced you know um effectively down a couple cents a day, but but but green over the five five-day change. So not as not as uh sensitive in pricing as some of these stocks, the volatility is significantly different uh to Bitcoin from these stocks here. Uh Bitcoin itself, we don't mention this too often. If you look at um, I always say to an analogy to people, if you if your grandmother bakes you a cake and you cut it into 10 slices, six of those slices, if you look at the whole of crypto, represent Bitcoin. The seventh slice represents Ethereum, and the other three slices represents the other 19,998 coins available out there. So that just tells you the dominance of the top two coins. That's why we really only highlight those on the channel because that's that's where you know the majority of the market capitalization in crypto is based on those two. Uh so I look today, Bitcoin just under 60% uh dominance and Ethereum just over 10% dominance. Um, and bear in mind in the past they've been slightly higher than that. We've seen Bitcoin dominance you know edging towards 70% and Ethereum dominance heading towards 12-13%. So um, you know, not too far away from their total, you know, their high dominances there. And it looks like over this past um you know few months, we've seen Bitcoin and Ethereum do slightly better than some of the other cryptocurrencies, uh, meaning that they've got that bigger share of the of the pie using that analogy price.

SPEAKER_01 12:51

Yeah, good analogy. Grandma's pie there, and we'll continue to monitor those ratios. But interesting, uh, we're saying the stocks are actually more volatile than Bitcoin. And for so many years, it was Bitcoin that was the very volatile uh class or asset class. We're gonna talk about some price targets a little bit later as well. So keep the numbers you're seeing on screen

Crypto Dominance And Stock Volatility

SPEAKER_01 13:12

in mind. Before we do, though, Anthony DMG, this came out late last week. We've talked a lot about their Christina Lake site. They've signed that LOI. This is a company based in British Columbia, so pretty close to home for me. They made two strategic investments last week, both in the data center AI space. So one of them actually based out of Vancouver. Uh, this is Meet Amy Innovations focused on fintech. They've also invested in Atomic 47 Labs. So Kelowna based. That's where I went to university, lived out there for 10 years. This is an applied AI company. So as you start to think about this shift to AI, you think about

DMG Moves Into Applied AI

SPEAKER_01 13:52

their core plus division of the Bitcoin mining or software components of the company. Very interesting to see some of these strategic investments, also citing the sovereign AI angle, both being Canadian companies. And we know they have that big Malahat agreement. So this was interesting. They also had some key personnel updates as well. I'll let you walk through there and some RSU updates.

SPEAKER_00 14:16

Yeah, so Jenya Bennett's um part of the DMG founder team there. She'd been promoted to the chief management officer, elevated from uh controller to chief management officer to manage the complexity as the AI data center business starts to scale. Remember, they've got that 50 megawatt LOI. We've been talking about that before they announced that deal. They had about you know 65 megawatts at that site there, and using uh you know a PUE in Canada, which uh you know would be significantly um more attractive than say in Texas, uh, that would allow certainly 50 megawatts, and they've got that uh LOI in place now. So hopefully they can put that into a formal contract. The other part they raised uh in the update was about options and RSU grants which have been issued. Now they've issued 122,000 or just slightly more than 122,000 options at 55 uh cents. So effectively uh employees and uh directors uh can purchase those. If they're issued options, they can purchase those um at that price. Um, you know, obviously believing that the the the the expectation of the share price will uh rather you have to buy them straight away, their options to buy in the future. So if the share price you know goes two, three, four dollars, then they have the options to buy at 55 cents. So they've got uh you know 122,000 of those. And they've also issued um, and we're seeing a lot more of this across a vast number of uh companies in the space, 1.275 million RSUs. Now, generally they're issued, they're not don't normally have a price associated with them, and they're normally aligned um you know into terms of performance or in terms of you know company, how the company performs themselves, their own performance, their own long-term incentives. Um so 1.275 million. If you look at that in terms of current share price, it's around about half a million dollars have been issued to employees and directors, you know, to incentivize them with a long-term growth. So those will be vested over a number of years. Um, so it's not, you know, it's it's not a massive amount. Remember, DMG is one of the smaller companies we talk about. We just about talk about the market capitalization claims, it's a hundred million. We talk about other companies that are in the sort of 10 billion plus range as well. So you are going to see um different amounts there. And um, interestingly enough, we did cover Iron recently in terms of the um R issues that the two co-COs, co-founds were awarded, um, which was about 800 million. Interesting enough today, there's there's uh uh chap on on X's uh Neil uh Kakani as uh he's put out um a tweet which garnered um you know best part of 900,000 uh views. Um he's only got about 3,000 followers, so he's not a big name on the on the on the X space there, uh you know, uh doing tweets there, but this one obviously caught the attention of a lot of a lot of people. Um and uh I'll let you start uh going through some of the points, Bryce.

IRIN RSU Backlash And Shareholder Letter

SPEAKER_01 17:24

Yeah, you're right about that. This RSU has been a hot topic. We've seen DMG, they just came out with their RSUs. Iron, uh, some of the criticism really surrounding the RSU grant, the fact they weren't linked to any performance obligations, more so time-based. Now, there's pros and cons to both. This is a founder-led organization. We know the co-founders, Daniel and his brother Will. Uh, obviously, more so than anyone invested in the future of this company. We know these are locked up over a significant amount of time, but in this four-page letter to the chairman directly, and again posted in public by Neil here, lays out some of the key, I guess, concerns or recommendations in terms of what he would maybe change to this plan.

SPEAKER_00 18:10

Yeah. Um, and he's put put a few recommendations in there. Well, it's quite a very well-worded letter, it's not something that's just uh an knee jerk reaction. Remember, the announcement came out a few weeks ago, so his letter today to the chairman. Um, you know, is I'd probably have time to think and reflect. But uh basically, uh, you know, he's asking for uh three asks in terms of you know, not confrontational ones. Uh, you know, he wants to reconcile the disclosure table with real consequences tied to the AGM advisory board. Now, the issue with IR at the moment is I think both co co-COs, co-founders, um, you know, have preference shares which give them quite a significant uh voting um ability. And so what you know he's asking for here, Neil's asking for the fact that the AGM advisory vote, uh, if it reaches 25% opposition, that would trigger it like an independent review, and a fresh previously uninvolved consultant to assess the performance conditions on the final two vesting tranches for 2029 and 2030. Now he's published his um his his letter in open and he's you know to the chairman, and he's also said that if he gets a response from the board, he will also publish that with equal prominence if they actually do respond to it. My my issue is is obviously you know that there was no metrics applied to this deal. This is effectively given to the two directors, but it gives them a you know given to them over a long period, you know, that they're not going to help anything with these shares until 2033, which is like seven years away. Uh, they won't be entitled to any further shares, you know, in terms of RSUs, I think until 2031. So that's five years away. It ties into the company. Well, they are the co-CEOs, co-founders. I'm assuming they want to stay and remain within the company. They built it so far, they want to carry on and deliver that. But the issue will be is that you know, this sets a precedent now and a benchmark that other companies are going to probably look to follow because you know what what these companies have effectively been doing is they'll go out and they'll pay for independent independent uh companies to go out and do a report on whether the CEOs are being paid the right level of salary compared to peer organizations. And if you're paying for a report to be done, how much of that becomes uh you know is totally independent? Because if you come back and say, you know, you're being overpaid at the moment um compared to your peers, um, I don't think that would go down too well. It seems to be that you know the independence there, and at the same time, you need to be paid more. Um that's the sort of that sort of challenge. And we're seeing it company to company. So, you know, one thing we will say is last year the iron share price did go from five dollars all the way up to $76, and there was no issue last year with any RSUs issued last year. I think this year the fact that the share price has pulled back 50% from its highs, that there was a significant amount of shares granted. Um, and we covered this on a previous podcast, but here's somebody who's basically obviously um you know got a lot of experience in the area and he's covered a lot of this in in various companies, and he's puts his thoughts to paper, issued the chairman a letter, and like he says, if he gets a response, he's going to share that in the same way he shared his original letter. So, you know, um at the end of the day, he's not um he's not doing it in out of mouth like that. He's just doing it as a from a as a sensible approach as a as a shareholder. So um, you know, take take what you think. We have seen a lot of uh criticism in terms of for or against the RSUs. We've covered that on previous podcasts. So we don't need to go like that today, but we just thought we'd highlight uh this as it was as it was out today, and it had already received the best part of a million views um in the first sort of like seven or eight hours. And so as I say, we'll keep you posted if we see any more updates. But but there was a lot of issues when the when the initial um initial initial um shares were announced as part of that RSU package.

SPEAKER_01 22:25

Yeah, and interesting to see how much commotion this is still garnering on X, obviously in the impressions count there. But as you say, Anthony, we like to show both sides of the coin here. Interesting perspective, very well written, and thought it was worth sharing. Now, moving into the main events, uh plural here, I guess,

Soluna LOI Momentum And New Coverage

SPEAKER_01 22:44

today. Saluna, last week we had John on the podcast. We had the monthly update out. We saw a paragraph in there saying an LOI has been signed for Cody 2. We said, John, we need some more details on this. Why don't you come talk to us? Phenomenal podcast, uh, more of a kind of fireside chat style, uh great discussion. And today it appears HC Wainwright has taken notice of some of these moves, some of this activity at Saluna. They've actually initiated coverage on Soluna with a $4 price target. So it's great to see some of these big notable banks, Anthony, starting to come into the sector and taking note of the exact thesis that we've been talking about for the last four years.

SPEAKER_00 23:26

Yeah, absolutely. It was a great podcast. And um, you know, uh going through the business update, it was just um, you know, came out as a normal update. There was no real uh big reference to it other than the sentence there saying they signed an LOI. John was able to put a lot more colour onto that, um, onto that sentence during the podcast there. He did say on his previous podcast when he was with this with the uh the the newly appointed CFO that they were expecting a a deal to be signed in 2026, and um and so we you know it wasn't it's not gonna be a total shock to some people out there that they've announced an LOI being signed now. What they'll be doing now is vastly working with the uh client to to get a contract formalised there. Now you can imagine they've probably been already been working significant amount of time. We know these things are taking probably five, six uh months to do around the table. We've had enough CEOs come on the podcast, talk about that first deal. Patrick Fleury uh probably put more colour into the deals and how they're um how they're discussed and how they're achieved than anybody else. He's very much like, you know, um, you know, he will not duck from any questions. He's quite happy to put his view, he's happy to put the company view, um, and he was very articulate in saying the how what the process goes on there. So we're using that as a sort of like a model when we speak to other CEOs. And um John sort of like nodded and and and and effectively sort of like the timeline seemed to be you know similar to what he was expecting as well. But this will be a phenomenal um deal for for Soluna. Remember, we've been covering them as a Bitcoin miner in terms of self-mining and in terms of growing that hosted mining business. This new uh you know potential 100 megawatt co-location deal at Cati 2 uh could really uh take the company to that next level. And as they go through those levels, the the the raising of capital because the issue with with Soluna and the issue with DMG and some of the smaller companies that we talk about on a daily basis, when you want to do something big, it doesn't sound a lot they're going to say, you know, they sign an LOI for 100 megawatts. 100 megawatts to deliver in this day and age now is is a minimum of about a billion dollars. It's uh it's 10 million to 12 million dollars to build a megawatt. So multiply that by the total. So you've got to raise that funding now, depending on the client, will help you get through a number of doors. If it's a a neo cloud or even a hyperscale, I would suggest it's probably in the neo cloud range, the 100 megawatts. John was very clear to say that you know they they know what what their expectations of a client, um, and I think that's quite you know right for him to say that neo clouds in in terms of contracts have been um awarding effectively better deals than the hyperscalers. We've covered um some of the hyperscalers uh deals with like um applied digital, they've got three or four um deals uh with hyperscalers of the last sort of few doors they've got, and the the prices in terms of dollar per megawatt, 1.6 to 1.7 million dollars. You know, we're seeing a lot more getting closer to $2 million per megawatt. We're seeing the recent TerraWolf deal at $2.35, $2.37 million per megawatt. Uh, we'll come on to cover um you know uh a deal today uh you know that shows you you know um uh a bit higher than that there. And and again, it's it's you know, if the neo clouds want that power and want to get ahead of the hyperscaler, they're probably offering a better incentive to some of these companies. So that's also what we're hearing from from CEOs of even the bigger mining companies that you know um you know there are sort of benefits, but if you get a hyperscaler, it's not maybe about the revenue, it could be about achieving lower costs in terms of you get someone like a Meta or a Microsoft or a or a or a or a Tesla or whatever, you know, a big big company coming in there demanding power, it's going to open doors for you, having that hyperscaler there, because you'll be able to borrow the money at probably lower rates. You're keeping your cost of capital down, and if you're keeping your revenues down, then you're probably still getting a very, very good percentage compared to those other companies who are getting higher revenues, but paying a little bit more for the for the actual um interest on some of the debt that they're having to achieve to deliver that project.

SPEAKER_01 28:03

Yeah, definitely well said, Anthony. And you can see as the companies move through those levels you're talking about, that's where these price targets come. So HC Wainwright, $4, 250 upside. We think that'll be the first of many upgrades or initiations from our friends over at Wall Street. Now, moving into one of those deals, you were just talking about value per megawatt.

Hut 8 Beacon Point Gigawatt Campus

SPEAKER_01 28:25

HUD 8 has now fully commercialized this one gigawatt Beacon Point AI data center campus. This is the second lease we've seen here again for 352 critical megawatts. This is a phenomenal deal, a phenomenal press release, great way to start the week, and gives us a really good indication of the potential value of these gigawatt campuses.

SPEAKER_00 28:51

Yeah, this is a massive deal. You know, uh same as the previous deal there. So it's a it's a it's it's literally the same same number. Second 352 megawatt lease, doubles that same investment grade tenants footprint now to 704 megawatts. So that's a one gigawatt site giving you 704 megawatts of compute power. Remember that number there. The campus level term contract value hits nearly 20 billion dollars. And if you look at the portfolio Y value that includes Riverbend, that now sits at over 26.6 billion. Um, as I say, the full 100% uh of this one gigawatt site is contracted against a secured AEP text is utility capacity with no incremental power needed, and the renewal options, if agreed, could push that campus value to 50.2 billion uh with the initial phase two delivery target in the second quarter of 2028. So effectively, in two years' time, they could have the whole of the one gigawatt site um up and running, starting to deliver uh that serious amount um of revenues there. And if you compare this to the uh the Corsicana site um belonging to Wright platforms, also in Texas, they're going to be able to achieve 756 megawatts total capacity um using that new latest design. So an extra 50 megawatts is going to uh you know deliver potentially another 80-90 million dollars uh per year in in um in revenues based on on the on the prices that we're seeing here. Yeah, so it'd be interesting to see you know how how you know this deal compares to future deals uh with a similar type of um you know facility in Texas itself there. But hats off to Hook A. They've managed to lease all their uh power at that site. And remember, they've got a long um power pipeline to to get through there. I think at one point in time it was about nine gigawatts. Well, they've now announced you know, probably one and a half gigawatts of that pipeline. So they've still got another maybe seven to eight gigawatts to apply, and they're probably still looking, as we're speaking, for the next site uh to come along. So uh this is a rinse and repeat type of um of service that uh you know we see many of these companies moving from that mining space into the HBCs, you know, delivering these contracts on an annual basis there um just to keep that momentum going, uh, drive the company. And as you see, one site being completed, the workforce will probably move to the next campus and start the next campus, and that's how these are expected to work.

SPEAKER_01 31:38

Yeah, another phenomenal co-location agreement or deal out from HUD 8. So congratulations to Asher and team. Now, once again, Wall Street taking notice here, Anthony. We have two updates out.

Hut 8 Price Targets And Upside Math

SPEAKER_01 31:50

So appreciate not only Canter, but Needham providing their updates here as well. One at 193, one at 145. Either case, Anthony, significant upside from where we're currently sitting.

SPEAKER_00 32:02

Yeah, so we've got the first one with uh Canter. They've come out with a uh a price target based on that second 352 megawatt deal, and they've issued a uh a target there of $193. Now, if you look at the hot share price uh this morning, it was like $90 before market open. That's an extra $100 on the share price. And even if you look now, the share price is $101, so it's potentially $90 more uh dollars there. They really see a lot of benefit in this deal here now, and also the fact that they've got this long pipeline of power. Now, moving across to the uh to the Needham update there, they've been a little bit more uh pessimistic in the in terms of their view. They've come out with a price target $145, so still potentially another $45 upside on on today. That's been raised from $128. And so if you look at again the share price uh today and that upside there, potentially another 40% of upside. And the reason they've raised this now is this you know uh uh additional amount of um revenue coming through in in the second quarter of 2028, uh this 1.7 billion per annum and the adjusted EBITDA to 1.32 billion for this extra site there, that's that massively increases um the company's um ability and in terms of uh valuation uh going forward there.

SPEAKER_01 33:29

So uh two great updates in terms of price targets for HUD and again we're seeing these banks discount future cash flows. So as we start to see more cash flow come from the AI operations, obviously that supports these analyst targets and

Iron Signs 2.8B In New Contracts

SPEAKER_01 33:44

metrics. Uh, we move over to Iron now, second landmark deal of the morning, Monday morning, signing an additional $2.8 billion worth of new customer contracts. So it's clear now they're going full focus on the CSP model, getting their own GPUs. In a lot of cases, it looks like now partnering with enterprises in the AI space. And as a result of this, Anthony, they've now increased their 2026 ARR target to over $4 billion.

SPEAKER_00 34:15

Yes, they've increased their target to, or I should say, over $4 billion, up from $3.7 billion, uh, with 85% now under contract, following this new multi-deal uh totaling 2.8 billion contract value, so an extra 300 uh million or slightly more than 300 million per year. Um, the the the customer roster continues to deepen with Microsoft NVIDIA, perplexity AI, figure AI, together AI, Fluid Stack, Fireworks AI to add um plus a new leading AI developer across bare metal and managed cloud. Now, another great thing to talk about this contract is in a similar way we talked about the Microsoft deal. When Microsoft signed that 200 megawatt deal, they gave Iron a sort of an advance of 1.9 billion to help buy the GPUs. Remember, the GPUs for that deal alone were $5.9 billion, and in terms of this particular deal now, uh customers are uh given advanced uh prepayments, um, which will help for the GPU CapEx. So they're prepaying about 45%. Um, and so that will be a significant benefit to IRIN in terms of the fact that you know they won't have to go out there and borrow um as much uh when they need to finance you know these these future GPUs. Now, in terms of the growth of the company, you can see from you know a year ago, literally three megawatts um to now 480 megawatts in a 12-month uh period, and they've built that AI cloud capacity scaling to 1.2 gigawatts, which is now targeted for 2027, with demand exceeding available and planned capacity. So, as soon as they're building the infrastructure, they're literally selling everything out there. Another great thing to mention is they've got this uh 7.6 billion dollars of cash on hand. I think the last time I looked at the balance sheet had about two and a half billion, so they've grown that probably through a number of levers. Obviously, the pre-payments on this deal here. Uh, they've also um you know had the opportunity uh to utilize the ATM. We'll find out in their earnings how much of that ATM, it was a six billion dollar ATM, how much of that earnings has been uh been utilized, and um you know it's just been one thing after the other. Now, there are two price targets out for IRIN today. First one is from Goldman Sachs, uh, they've raised the price to or they maintained the price at $50, so they're not buying too much into this here, into this deal, in terms of you know, this additional $300 million per year of annualized revenue. Um, but even on today's price, um, earlier in the day, that would have been a projected upside of about 23.85%. Um, the next one is is one that we get from Cancer, who produce updates literally every time a major um update from a company comes out, they'll re-assess their um their price targets and their ratings for company. They've gone one stage further, they've they've now given it an overweight rating and a target of $99, um, which based on on this on this deal today. So, quite clearly, um, as we see from a number of uh Wall Street analysts, you're never going to get all these analysts agreeing on the same price. They all have their own models to to work through there. Some are uh you know are maybe less pessimistic, but and don't discount you know either of these because you know we've seen the share price you know rally um you know to nearly $80 intra-day back in October, November last year, and we can see it come all the way back down to $30. You know, the market is the market, it's very, very difficult to price, you know, with with real accuracy because so many factors can affect they're basing pricing on um eBit DAR and earnings, not this year, but probably 2027 onwards. And so, you know, a lot of things can happen between now and 2027 in terms of you know, if you're if you're providing a deal, uh, we talked about this. Are you providing a deal where you're getting no penalties against that deal? Are you providing the perfect contracted uh deal and receiving all the all the revenues? Um, that's why we we've generally highlighted we like the co-location deals because there's less risk involved. Of course, there are risks still in terms of power, but if you've got a a contract that even the power is a pass-through cost or the or the client signs a power deal with the provider, that even reduces that risk there. With GPUs, you've got to uh maintain a performance that's in the contracts. Now, it might give you some sort of leeways to to achieve, you know, you you can reduce so much when there's mitigating circumstances, but a lot of these contracts I've worked on in in the service industry, um, you can't do it for long periods of time because the penalties start ramping up, and we've yet to see enough contracts what's going to happen. We will start by the end of this year, we'll definitely see in the core scientific contracts how much they're having to repay. Remember, they've issued about 400 megawatts of compute power out of that 590 to core weave, and so we'll start seeing in their quarterly updates. Quarter two is coming out soon, and then quarter three, quarter four will give you an even bigger picture as they pretty much you know uh sign off the whole compute deal there. Iron will go through this process now as they're starting to um you know sign over parts of the horizon one, two, three, and four to Microsoft, what that looks like in terms of service in the pro in the following quarters going forward. And once those numbers come in out there, you'll I bet you you'll see these analysts start to either you know confirm their price targets or sort of re-evaluate their price targets because you know ebitar will take account of the costs as well. It won't just uh it won't just be a revenue-driven estimate, um, it will be sort of more of a sort of like uh what's the profitability when you're paying back an element of these uh costs for service performance?

SPEAKER_01 40:21

Yeah, this was a really strong update for me. We know the iron share price has been beaten up, but if you look between the lines here, that 45% customer GPU prepayment, the depth of that client roster, Anthony. You talk about hyperscalers, Microsoft, NVIDIA doesn't get much bigger than that, but now they're targeting these AI labs and enterprises. You can see phenomenal client diversification there. Then you start to think about that power pipeline, all these strategic MA deals and press releases. I think iron is just getting warmed up here, and this was a great press release to kick off the week.

What We’re Watching Next

SPEAKER_01 40:57

So, with that being said, you guys, a couple of monster deals. Monday morning, share prices are up, double digits, some phenomenal news in the marketplace. We'll see if this continues throughout the week, but we'll say one thing for sure a much better way to start the week than we ended it last week. So, with that being said, let us know your thoughts. We'll see you back here tomorrow. Thanks for watching.