IREN Stock Slumps as AI Pivot Raises Funding Concerns

IREN's stock has been struggling on Wall Street after its pivot to AI data centers raised concerns about funding. The company, which initially focused on Bitcoin mining, now generates close to half of its revenue from GPU cloud contracts. Its two major deals with Microsoft and Nvidia are valued at $9.7 billion and $3.4 billion respectively, but IREN's capital commitments exceed $13.81 billion, leaving a gap of approximately $6.19 billion as of June 30.

The company's fiscal 2027 capex plan is expected to reach $25-30 billion, which has analysts questioning whether IREN can fund its growth without diluting shareholders. Despite having a strong demand for AI infrastructure, the bear case argues that the company will struggle with financing math.

Bulls point to CoreWeave's success in building up a backlog of $67 billion, but argue that IREN's ownership structure gives it an advantage over its competitor. The company owns 4.5 gigawatts of power generation capacity outright and has GPU financing at around 3%, whereas CoreWeave leases most of its power and carries financing at SOFR plus 400 basis points.