Target Hospitality shares surge 10% after securing $250 million data centre contract

Target Hospitality shares surge 10% after securing $250 million data centre contract

Fiona Craig

Wed, August 26, 2026 at 3:27 PM GMT+3 2 min read

• TH +12.99%

Target Hospitality Corp. (NASDAQ:TH) shares climbed 10% on Wednesday after the company secured a new multi-year contract expected to generate approximately $250 million in revenue from a major hyperscaler data centre project.

Under the agreement, Target Hospitality will provide comprehensive facility and hospitality services for a data centre development in the Pecos region of West Texas. The site is expected to accommodate approximately 1,100 people.

The company plans to prepare the community by modifying existing under-utilised assets, with initial occupancy targeted for the third quarter of 2026.

Contract expected to generate revenue through 2030

Target Hospitality expects the agreement to contribute approximately $250 million in revenue through August 2030.

The award further expands the company's workforce hospitality solutions portfolio across multiple top-five hyperscaler customers, strengthening its exposure to the rapidly expanding data centre industry.

Importantly, the modifications required to prepare the community are expected to involve less than $15 million of capital investment, allowing Target Hospitality to utilise existing assets rather than develop an entirely new facility.

Target Hospitality raises 2026 guidance

Following the contract win, Target Hospitality increased its financial outlook for the full year.

The company now expects 2026 revenue of between $435 million and $445 million, representing a 6% increase at the midpoint compared with its previous forecast.

Adjusted EBITDA guidance was raised to between $105 million and $115 million, an increase of 22% at the midpoint.

The improved outlook reflects the contribution expected from the latest contract alongside Target Hospitality's growing portfolio of workforce accommodation agreements.

Multi-year contract awards surpass $1.7 billion

Since January 2026, Target Hospitality has secured more than $1.7 billion of multi-year contract awards across its workforce hospitality solutions business.

Based entirely on contracts already secured, the company expects to exit 2027 with annualised revenue exceeding $750 million and annualised adjusted EBITDA of more than $300 million.

The latest agreement includes minimum contractual commitments and take-or-pay provisions, which should provide greater revenue visibility while improving utilisation across Target Hospitality's existing asset base.

Management said the company's operational capabilities allow it to respond to additional customer demand while continuing to meet commitments to existing clients.

The combination of a sizeable new hyperscaler contract, relatively modest capital requirements and higher 2026 financial guidance helped drive the strong reaction in Target Hospitality shares.

Target Hospitality stock price