IREN Shares Plunge as Analyst Sees AI Goldmine in Company's Downfall

IREN's AI cloud business is rapidly gaining momentum, according to analyst Gregory Miller of Citizens JMP. Despite the company's shares sinking more than 7% after its fiscal fourth-quarter results, Miller sees the selloff as a buying opportunity due to the strong growth in IREN's AI cloud revenue.

IREN's underlying legacy business is shrinking, with Bitcoin-mining revenue plummeting 63% year over year to $66.7 million. However, this decline was offset by a surge in AI Cloud Services revenue, which jumped 907% to $70.5 million from $7 million a year earlier.

The company's fourth-quarter revenue fell 27% year over year to $137.23 million, but still beat Wall Street's estimate of $132.29 million. IREN posted an adjusted loss of $0.41 per share, better than the $0.55 loss analysts expected, but sharply below the $0.08 profit reported a year earlier.

Citizens JMP expects reported results to remain uneven while new infrastructure comes online, but Miller points to $1 billion of annual recurring revenue already operating and $4 billion of contracted ARR as evidence that the AI transition is gaining traction.