IREN Stock Plunges as Bitcoin Mining Transition Accelerates

IREN Ltd., a company that operates in both Bitcoin mining and AI cloud services, saw its stock drop by over 8% after it reported weaker-than-expected fiscal fourth-quarter results. The revenue decline was largely due to the company's transition away from Bitcoin mining towards AI Cloud services.

The company reported revenue of $137.2 million for Q4, which fell short of Wall Street's consensus estimate of $157.14 million. Additionally, IREN reported an adjusted loss of $0.41 per share, wider than analysts' expectation of a $0.34 per-share loss.

Despite the overall revenue miss, IREN's AI Cloud business showed significant growth, with AI Cloud revenue reaching $70.5 million in the June quarter. This helped offset some of the decline in Bitcoin mining revenue.

The company expects its mining operations to be effectively decommissioned by December 2026 as it continues to shift focus towards AI cloud services. IREN's AI Cloud annual recurring revenue (ARR) crossed $1 billion, with a target of exceeding $4 billion by the end of December 2026. This target is already contracted, with Horizons 2-4 expected to contribute to the December-quarter run rate.

However, this rapid growth comes with significant capital requirements, with IREN expecting FY2027 capital expenditure of around $25 billion-$30 billion. First-quarter cash SG&A is also expected to rise by $40 million-$50 million sequentially.