IREN Stock Surges on Microsoft Approval of First AI Data Center Site

IREN's stock price surged on Monday after Microsoft approved its first AI data center site, Horizon 1. The approval moves an important part of IREN's $9.7 billion cloud agreement with Microsoft from construction to customer acceptance.

The 50MW site provides direct-to-chip liquid cooling capacity and is the first of four similarly sized installations planned for this year. This milestone is crucial as IREN aims to rapidly expand its AI-cloud business, currently generating about $134.5 million in annualized revenue, a far cry from its $4 billion year-end target.

IREN has already secured 85% of its $4 billion AI-cloud target through contracts, giving investors some visibility into future demand. However, contracted revenue does not mean immediate recognition. Horizon 1 demonstrates the scale of opportunity, with a single approved site potentially having an annual service value larger than IREN's current AI-cloud revenue run rate.

Analysts are divided on whether IREN's strong growth expectations are already reflected in its stock price. Goldman Sachs kept a Neutral rating, highlighting improved customer diversification but questioning how quickly growth will turn into actual earnings and cash.