![\"AI](\"https:\/\/www.europesays.com\/ai\/wp-content\/uploads\/2026\/05\/1778695999.jpeg\")
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AI Infrastructure by FOTOGRIN via Shutterstock <\/p>\n
For months, the bears had a simple story on IREN (IREN)<\/a>. They saw it as a Bitcoin (BTCUSD)<\/a> miner calling itself an artificial intelligence (AI) company, promising huge cloud contracts while delivering almost none of the revenue. Recent developments have made that argument much weaker.<\/p>\n IREN recently announced that Horizon 1, the first of four data centers it is building for Microsoft (MSFT)<\/a>, has been delivered and formally accepted. Microsoft had a five-day window to test the deployment against agreed standards, and once it signed off, IREN was cleared to start sending monthly invoices to Microsoft. This is the first revenue from a five-year $9.7 billion contract<\/a>, not another promise about capacity to come.<\/p>\n The validation didn\u2019t stop there. Nvidia (NVDA)<\/a> tested the site running its GB300 systems and granted it Exemplar Cloud status. This is a certification reserved for providers that meet its performance and reliability bar. For a company that listed in 2021 as a Bitcoin miner, having Nvidia vouch for your AI infrastructure is massive.\u00a0<\/p>\n Why This Is Bigger Than It Looks<\/p>\n The context is what makes this interesting. The real question hanging over IREN was never demand, but whether it could keep funding a buildout that cost many times its revenue. Horizon 1 starts to answer that.<\/p>\n IREN already lined up a $3.65 billion debt package backed by the Microsoft deal, rated investment-grade. It covers almost all of the GPU spending tied to the contract. As I previously covered<\/a>, IREN also holds a five-year $3.4 billion cloud deal with Nvidia, giving it a second large, contracted revenue stream.\u00a0<\/p>\n More than a quarter of IREN\u2019s shares are still sold short. Much of that bet assumes the pivot won\u2019t work, or that IREN will sink under its own debt and share dilution. The Microsoft and Nvidia deals<\/a> are the company\u2019s answer to these concerns.\u00a0<\/p>\n The AI business is still small next to Bitcoin mining today. But the company is starting to transition at a rapid pace. In its last quarterly release, IREN reported a sharp drop in Bitcoin revenue while AI cloud services revenue nearly doubled<\/a>. The firm has now cleared its first major execution hurdle by securing the Microsoft deal. The next test comes on Aug. 27, when earnings should start to show whether all this capacity is turning into real money.\u00a0<\/p>\n About IREN Stock\u00a0<\/p>\n IREN operates large data centers powered mainly by renewable energy and used for Bitcoin mining, AI computing, and other high-performance computing applications. The company’s large-scale, grid-connected facilities are purpose-built for the next generation of power-dense computing applications. The company was founded in 2018 and is headquartered in Sydney, Australia.\u00a0<\/p>\n Over the last 12 months, IREN stock has climbed 114%<\/a>, easily outperforming the S&P 500 ($SPX)<\/a>, which has risen approximately 20% during the same period. The rally was driven by IREN\u2019s emergence as a leading AI infrastructure provider. The company has secured multibillion-dollar contracts with major AI customers, rapidly expanded its AI cloud business, and raised its revenue targets as demand for AI computing capacity has continued to outpace supply. However, on a year-to-date (YTD) basis, the stock has gained 10%, marginally underperforming the S&P 500\u2019s gain of 12% YTD.\u00a0<\/p>\n IREN\u2019s valuation is hard to judge by the usual measures. The company isn\u2019t consistently profitable yet as it absorbs the cost of its pivot, which means the forward price-to-earnings (P\/E) ratio isn\u2019t meaningful right now. The price-to-sales (P\/S) ratio of 16.6 times has no historical average to compare against, because IREN has only recently started transitioning to being an AI firm rather than a Bitcoin miner. The P\/S multiple is undoubtedly steep, but it reflects a business the market expects to look very different in a couple of years.<\/p>\n Earnings estimates<\/a> are also unclear. Analysts aren\u2019t sure of what the earnings trajectory will be in the next couple of years, although a sharp jump is expected later in the decade. That surge seems to be consistent with the firm\u2019s AI cloud revenue expected to ramp.<\/p>\n The capital structure is where the real tension sits. IREN already had net debt of roughly $1.75 billion, and it has now arranged a further $3.65 billion in financing backed by the Microsoft contract. So, the numbers can\u2019t settle this one. It\u2019s a bet on execution, where delivering the Horizon facilities justifies today\u2019s price, and any stumble leaves the debt as the real concern.\u00a0<\/p>\n IREN Grows AI Business as Bitcoin Fades<\/p>\n IREN reported third-quarter fiscal 2026 earnings<\/a> on May 7. Total revenue of $144.8 million fell 22% from the previous quarter. Loss per share came in at $0.30, which fell short of the Wall Street consensus for a loss per share of $0.21. The quarterly results highlight IREN’s ongoing transition from Bitcoin mining to AI cloud infrastructure services. While AI Cloud Services revenue surged 94% sequentially, overall revenue declined due to a significant drop in BTC mining revenue.<\/p>\n Looking forward, IREN maintains a positive outlook for AI cloud services despite the current quarter\u2019s challenges. The firm expects revenue to increase, driven by strategic partnerships and expansion plans. However, a continued decline in BTC mining revenue could affect the company’s overall financial performance. Management also highlighted that non-cash impairments and unrealized losses may persist, which will impact profitability.<\/p>\n What Do Analysts Expect for IREN Stock?<\/p>\n Bernstein analyst Gautam Chhugani recently reiterated a \u201cBuy\u201d rating on IREN stock and assigned a price target of $100, reflecting impressive potential upside of 135% from current levels. In contrast, Needham analyst John Todaro maintained a \u201cHold\u201d rating. This shows that Wall Street remains divided on IREN. However, following the company\u2019s Q4 results set to be announced on Aug. 27, analysts will update their financial models and likely issue new price targets.\u00a0<\/p>\n Based on 15 Wall Street analysts with coverage, IREN stock holds a consensus \u201cModerate Buy\u201d rating.\u00a0Out of those analysts, 11 have a \u201cStrong Buy\u201d rating, three have a \u201cHold\u201d rating, and one has a \u201cStrong Sell\u201d rating. The mean price target of $78.64 implies potential upside of 85% from current levels, reflecting strong confidence in IREN\u2019s long-term growth prospects.<\/p>\n ![](\"https:\/\/barchart-news-media-prod.aws.barchart.com\/EXCLSV\/5c66cd2d14d188a9120ca8ad2cd6f843\/kzoycuj2allmgeb7.png\")
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On the date of publication, Jabran Kundi<\/a> did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here<\/a>. <\/p>\n","protected":false},"excerpt":{"rendered":"AI Infrastructure by FOTOGRIN via Shutterstock For months, the bears had a simple story on IREN (IREN). They…\n","protected":false},"author":2,"featured_media":37857,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[420,7829,320,7828,5912],"class_list":["post-146610","post","type-post","status-publish","format-standard","has-post-thumbnail","category-microsoft","tag-azure","tag-azure-ai","tag-microsoft","tag-microsoft-ai","tag-n-a"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/146610","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/comments?post=146610"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/146610\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/37857"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=146610"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=146610"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=146610"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}