Market rallies can make everything look expensive, but not every stock moves the same way. The best “cheap after a rally” ideas often sit in areas investors still misunderstand or punish too harshly. They may have commodity exposure, temporary earnings pressure, or a business model in transition. That can create opportunity for patient investors.
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HUT
Hut 8 (TSX:HUT) just jumped about 35% on the TSX after the company announced a massive new artificial intelligence (AI) data-centre lease. This is no longer just a Bitcoin-mining story. Hut stock now wants investors to see it as an energy infrastructure platform built around power, digital infrastructure, and compute.
The spark came from Hut 8’s Beacon Point project in Texas. Hut signed a 15-year lease covering 352 megawatts (MW) of IT capacity, with a base-term contract value at US$9.8 billion. If the tenant uses all renewal options, the value could rise to US$25.1 billion. Hut stock said the deal lifts its total contracted AI data-centre capacity to 597 MW, with an aggregate base-term contract value of about US$16.8 billion. This update also builds on the River Bend project in Louisiana, where Hut stock recently closed US$3.25 billion of investment-grade senior secured notes. In short, Hut stock found a way to fund a huge project without simply dumping the burden onto existing shareholders.
The earnings picture still looks messy, which keeps the risk high. Hut stock reported first-quarter 2026 revenue of about US$71 million, up 225% from the year before, while its quarterly loss narrowed to US$0.26 per share. AI and cloud compute revenue drove most of the growth, rising 309% to about US$66 million. So, does Hut stock still look cheap after a 35% jump? Not in the traditional sense. Yet the stock may be reflecting growth early, if Hut 8 turns these AI leases into long-term contracted cash flow.
LIF
Labrador Iron Ore Royalty (TSX:LIF), meanwhile, gives investors exposure to iron ore without running a mine directly. It owns a royalty interest and equity stake tied to Iron Ore Company of Canada (IOC), which produces high-grade iron ore concentrate and pellets in Labrador City. That makes LIF a simple business on the surface. It collects royalty revenue, receives IOC dividends when available, and passes much of that cash to shareholders.
Recent news has not looked perfect. In the first quarter of 2026, LIF dealt with lower concentrate and pellet sales volumes, weaker IOC profitability, and operational issues tied to haul truck availability and pellet plant reliability. Still, iron ore prices showed some resilience, with the 65% iron index averaging US$121 per tonne in the quarter, up 3% from the same period in 2025. Royalty revenue came in at $35.4 million, almost flat from $35.6 million a year earlier. Net income per share fell 36% to $0.21, while adjusted cash flow per share held steady at $0.31.
The valuation also keeps the stock interesting. LIF recently traded near 19 times earnings with a dividend yield a 4.9% and a trailing payout that reflects its cash-flow-heavy model. It’s not a traditional growth stock, and investors should expect dividends to move with iron ore prices and IOC performance. Yet LIF remains debt-free, had positive working capital of $27 million at quarter-end, and offers exposure to high-grade iron ore, which could matter if steel demand improves.
Bottom line
LIF offers income, iron ore exposure, and a simple royalty model at a still-reasonable price. Hut stock offers a riskier but potentially larger AI-infrastructure reset. One is built around cash flow, while the other is built around transformation. Yet both are still look worth watching after the rally, as long as investors understand the very different risks.
