Iris Energy Limited

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Somewhat Bearish -45

IREN Sinks 9%, CoreWeave Down 6% as Democrats Win Congress: Cramer Warns “Be Careful”

Company update AI-generated analysis

📉 IREN shares dropped 9% today after Democrats won Congress and Texas elected a governor supporting a data center moratorium.

⚠️ Jim Cramer issued a warning to investors to be careful with IREN and similar AI infrastructure stocks like Nebius following the election results.

🏗️ Approximately half of IREN's power capacity is located in Texas, where three campuses hold 2.75 gigawatts of its total secured capacity.

🚧 A potential moratorium on new data center construction in Texas could halt the development of halls IREN has not yet built.

💰 Analysts expect IREN revenue to nearly quadruple from $707 million to $2.81 billion by fiscal 2027 before reaching $7.41 billion.

📝 IREN has already secured $4 billion of annual run-rate revenue for capacity coming online this year, insulating near-term earnings slightly.

🔮 Fiscal 2028 revenue projections are considered more exposed to the potential impact of a Texas data center moratorium.

💸 IREN guides to $25 billion to $30 billion in capital spending for the fiscal year after a 48% jump in share count last year.

📊 The stock trades at 3.1x forward sales, well below its 5.2x three-year average and 17x peak valuation from November 2025.

🔍 Thursday's fiscal first-quarter report is expected to provide clarity on share count changes and management's stance on Texas financing.

Bullish Signals
  • IREN has already contracted $4 billion of annual run-rate revenue for capacity coming online this year, which may insulate near-term earnings from immediate political headwinds.
  • Analysts project revenue to nearly quadruple from $707 million in fiscal 2026 to $2.81 billion in fiscal 2027, demonstrating strong long-term growth expectations.
Risk Factors
  • IREN shares fell 9% today after Democrats won Congress and Texas elected a governor pledging a moratorium on new data center construction.
  • Approximately half of IREN's power capacity is in Texas, where three campuses hold 2.75 gigawatts of its roughly 5 gigawatt secured capacity, making it vulnerable to local regulatory changes.
  • A potential moratorium on new data center construction in Texas could stop the development of halls IREN has not yet built, threatening future expansion plans.
  • Jim Cramer warned investors to be careful with IREN and similar AI infrastructure stocks following the election results, highlighting market sensitivity to political headlines.
Full Analysis
IREN shares fell 9% following US election results where Democrats won Congress and Texas elected a governor pledging a moratorium on new data center construction. The stock, along with peers CoreWeave and Applied Digital, reacted negatively to the political shift, though Jim Cramer specifically warned investors to be cautious regarding IREN and similar AI infrastructure plays amid these headlines. A significant portion of IREN's operations is located in Texas, where three campuses hold 2.75 gigawatts of its roughly 5 gigawatt secured capacity. The potential for a construction moratorium threatens future expansion plans for the halls it has not yet built, creating uncertainty around its growth trajectory despite existing contracts. Analysts project IREN's revenue to nearly quadruple from $707 million in fiscal 2026 to $2.81 billion in fiscal 2027, eventually reaching $7.41 billion. However, the company has already contracted $4 billion of annual run-rate revenue for capacity coming online this year, suggesting the immediate election outcome may not drastically alter fiscal 2027 expectations but leaves fiscal 2028 more exposed to regulatory changes. IREN guides to $25 billion to $30 billion in capital spending for the current fiscal year following a 48% increase in its share count last year. The stock trades at 3.1x forward sales, significantly below its historical average and peak valuation, indicating that investor sentiment remains highly sensitive to any news regarding who pays for AI infrastructure development.