IREN Stock Jumps as AI Cloud Pivot Gains Momentum
IREN (NASDAQ: IREN) stock rose by 5.18% on September 3, closing at $41.65. This increase put the shares back above their post-earnings drop low.
The company has been working to transition its business from Bitcoin mining to AI cloud infrastructure. It recently announced partnerships with Microsoft and Nvidia, which have granted IREN contracts worth billions of dollars.
Microsoft has a five-year contract worth around $9.7 billion for cloud services at IREN's Texas campus. The campus is being built out to support 200 megawatts of IT load across four phases.
Nvidia signed its own five-year AI cloud services contract with IREN in May, worth approximately $3.4 billion. This deal will support internal AI and research workloads.
IREN's fiscal 2026 results show the company has $4 billion of contracted annualized run-rate revenue for 2026 capacity and $1 billion of operating ARR today. The AI Cloud Services revenue reached $128.8 million in the full fiscal year, compared to $16.4 million a year earlier.
The transition from mining to cloud infrastructure comes with significant costs. IREN reported a net loss of $684 million in the June quarter, which included $450.4 million of non-cash impairments mainly tied to decommissioned Bitcoin mining hardware.
Analysts remain optimistic about IREN's prospects, with Bernstein's Gautam Chhugani reiterating an Outperform rating and a $100 target after the Nvidia contract. However, there are risks associated with the company's pivot, including financing costs and delivery of the cloud infrastructure projects on schedule.