Shares of IREN and Hut 8 jumped on Tuesday after data center projects tied to the companies received conditional classifications through Texas' new power grid review system.
IREN rose more than 8% to a more-than-two-month high of $48.40, while Hut 8 (HUT) jumped 7% to reclaim the $100 level for the first time in a month.
On Tuesday, IREN said its 2 GW Sweetwater Hub was conditionally included as Base Load in the Electric Reliability Council of Texas' Batch Zero process. The designation covers the 1.4 GW Sweetwater 1 project and 600 MW Sweetwater 2 project.
IREN added that other projects in its development pipeline were also included in Batch Zero, though grid connection agreements still need to be ironed out before adding them to its portfolio.
Hut 8's Beacon Point data center also received a conditional Base Load classification, according to a tweet posted by the company late Friday.
The Texas campus supports one of two 15-year data center leases signed by Hut 8, covering 704 MW of IT capacity and $19.6 billion in base contract value.
'Base Load' projects qualify to be incorporated into ERCOT's system-wise study, instead of being treated as newly proposed loads without requested power reservations.
StoneX analyst Mark Palmer called the Beacon Point classification Hut 8's "most consequential regulatory development" of the year, arguing that it reduces the uncertainty around the project's access to power. The firm reiterated its Buy rating and $195 price target for Hut 8, roughly double the price it's at today.
The classifications do not automatically mean the firms have final permission to connect to the grid. Failure to meet certain verification and modeling data requirements could disqualify them from Batch Zero.