Canaccord Genuity analyst Joseph Vafi maintained a Buy rating on Hut 8 Corp. (NASDAQ:HUT) and reiterated the $32 price forecast.

Canaccord Genuity analyst Joseph Vafi maintained a Buy rating on Hut 8 Corp (NASDAQ:HUT) and reiterated the $32 price forecast.

Hut 8 is aiming to expand its Bitcoin (CRYPTO: BTC/USD) miner power portfolio and existing assets while simultaneously pursuing emerging opportunities in AI hosting without hindering either endeavor, the analyst noted.

The company's subsidiary, American Bitcoin, is set to merge with Gryphon Digital Mining, Inc (NASDAQ:GRYP) in a stock-for-stock deal to create a publicly listed company focused on large-scale Bitcoin mining and emerging technologies, such as AI hosting.

The combined entity will operate under the American Bitcoin brand and is expected to trade on the Nasdaq Stock Market LLC (Nasdaq) under the ticker "ABTC." The merger, which has been approved by both companies' boards of directors, is still pending approval from Gryphon's shareholders and the relevant regulatory authorities.

"We estimate the transaction values Gryphon at about a 20% premium to Monday's closing price, and the deal will be paid for entirely in American Bitcoin stock," Vafi wrote in a Monday note.

The deal is expected to close in the third quarter of 2024.

The integration of American Bitcoin's and Gryphon's operations and assets is anticipated to create a leading North American Bitcoin miner with a pro forma hashrate of approximately 11.0 exahash per second (EH/s) and a combined operating income of about $109.7 million for the year 2023.

"We remain above-market bullish on HUT, driven by our belief in the long-term narrative of Bitcoin scarcity and price appreciation, which is a core component of our thinking on HUT," the analyst added.

The analyst's price forecast provides a $17.48 upside to the Monday closing price of $15.00.

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