IREN Stock Takes Hit Despite Explosive Growth in AI Cloud Services
IREN's stock price plummeted by over 8% in after-hours trading on Thursday, despite its impressive growth in AI cloud services. The company, formerly a Bitcoin mining specialist, reported weaker-than-expected fiscal fourth-quarter results. Revenue came in at $137.2 million, below Wall Street expectations of about $157.1 million.
However, IREN's transformation into an AI infrastructure company is paying off in the long run. Its AI cloud services revenue more than doubled sequentially to $70.5 million from $33.6 million, accounting for just over 51% of total quarterly revenue. For the full fiscal year, AI Cloud revenue surged nearly eightfold to $128.8 million, while total company revenue climbed 41% to $707 million.
The company's massive five-year Microsoft contract worth approximately $9.7 billion is a major anchor for its transformation. IREN's infrastructure uses Nvidia GB300 systems and has around $4 billion in contracted annualized run-rate revenue associated with its 2026 AI capacity, with approximately $1 billion already operating.
Investors are weighing the pros and cons of IREN's shift from Bitcoin mining to AI cloud services. While the company has billions of dollars in contracted future business, it also faces enormous capital requirements and the near-term cost of dismantling its bitcoin-mining roots.