Iris Energy Limited

NASDAQ Global Select
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Bullish +65

Is Iren Stock a Buy Now? - The Globe and Mail

AI infrastructure Business restructuring Cloud expansion AI-generated analysis

🔄 IREN is pivoting from Bitcoin mining to AI cloud services, winding down crypto operations by the end of the year.

💰 The company recorded a net loss of $702.6 million in fiscal 2026 due to a $638.8 million noncash asset impairment charge for decommissioning hardware.

📈 AI cloud services revenue surged from $16.4 million in 2025 to $128.8 million in 2026, reflecting rapid business expansion.

🤝 IREN secured a massive $9.7 billion cloud services deal with Microsoft to provide GPU clusters for 200 MW of IT load.

🚀 The Microsoft contract is expected to deliver roughly $1.94 billion in annualized run-rate revenue when fully commissioned.

👥 IREN's workforce nearly tripled during the year and hired C-suite leaders from Nvidia, AWS, Oracle, and Google.

📜 The company has additional contracts with AI firms including Perplexity, Cohere, Together AI, Fal AI, Higgsfield AI, and Prometheus.

💸 Projected capital expenditures for 2027 are estimated between $25 billion and $30 billion to upgrade data centers for Nvidia chips.

📉 The stock has traded down approximately 37% from its 52-week high as the market digests the transition costs.

⚠️ Analysts suggest IREN is a solid growth play for AI hyperscalers but advises against it for conservative investors seeking dividends.

Bullish Signals
  • Secured a $9.7 billion cloud services deal with Microsoft, expected to deliver roughly $1.94 billion in annualized run-rate revenue upon full commissioning.
  • AI cloud services revenue surged from $16.4 million in 2025 to $128.8 million in 2026, demonstrating rapid growth in the new business segment.
  • Signed contracts with a diverse portfolio of AI companies including Perplexity, Cohere, Together AI, Fal AI, Higgsfield AI, and Prometheus.
  • Workforce nearly tripled during the year while bringing in C-suite leaders from major technology giants like Nvidia, Amazon Web Services, Oracle, and Google.
  • Successfully pivoted its compute infrastructure from Bitcoin mining to providing large-scale GPU clusters for critical AI workloads.
Risk Factors
  • Recorded a net loss of $702.6 million in fiscal year 2026, a significant increase from the previous year's profit.
  • Incurred a massive $638.8 million noncash asset impairment charge related to decommissioning and writing down its Bitcoin mining hardware.
  • Faces projected capital expenditures of $25 billion to $30 billion in 2027 to upgrade data centers for powerful Nvidia chips.
  • Is winding down its traditional Bitcoin operations by the end of the year, which may impact short-term cash flows during the transition.
Full Analysis
IREN is executing a strategic pivot from Bitcoin mining to AI cloud services, marking a significant shift in its business model. The company is winding down its cryptocurrency operations by the end of the year to focus entirely on managing AI workloads for technology hyperscalers. This transition involves redirecting existing compute infrastructure and expanding its workforce to support high-demand artificial intelligence training and inference tasks. Financially, the pivot has resulted in substantial short-term costs but promises significant future revenue growth. For fiscal year 2026, IREN recorded a net loss of $702.6 million, driven largely by a $638.8 million noncash asset impairment charge for decommissioning mining hardware. Conversely, AI cloud services revenue surged from $16.4 million to $128.8 million in 2026, demonstrating rapid adoption and market traction. The company has secured major contracts that anchor its future growth trajectory, most notably a $9.7 billion deal with Microsoft. This agreement involves providing large-scale GPU clusters to handle 200 megawatts of IT load at its Texas campus, expected to generate roughly $1.94 billion in annualized run-rate revenue upon full commissioning. IREN has also signed contracts with various other AI companies, including Perplexity and Cohere, further diversifying its client base. Looking ahead, IREN plans aggressive capital expenditures of $25 billion to $30 billion in 2027 to upgrade data centers for powerful Nvidia chips. While the company is using debt and customer pre-payments to fund half of these GPU costs upfront, analysts note that this high-growth strategy may not suit conservative investors seeking dividends or capital preservation, though it offers substantial potential for growth-focused participants.