Compute · Microsoft · The Block
IREN’s $25 billion-$30 billion AI buildout may have ‘spooked’ investors, Bernstein confirms
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IREN's plans to spend $25 billion to $30 billion building out its AI cloud business in fiscal 2027 may have "spooked the market," according to analysts at research and brokerage firm Bernstein, who argue investors are overlooking improving economics as the bitcoin miner scales its compute infrastructure.
Key facts
- Including another $700 million associated with an Nvidia contract expected in 2027, IREN's total contracted cloud ARR amounts to $4.7 billion, according to Bernstein
- IREN currently has $1 billion in operating cloud annualized run-rate revenue and $4 billion contracted against its largely sold-out 2026 capacity
- Bernstein maintained its Outperform rating and $100 price target on IREN, versus Thursday's closing price of $40.53, implying potential upside of 147%
- IREN's fiscal 2026 results, released Thursday, showed AI cloud services revenue increased nearly eightfold to $128.8 million in fiscal 2026 from $16.4 million the previous year, while bitcoin mining
Summary
"The high capex number may have spooked the market, but the investors seem to ignore improving unit economics with faster payback on incremental capex," analysts led by Gautam Chhugani wrote in a note to clients on Friday, viewed by The Block. IREN's fiscal 2026 results, released Thursday, showed AI cloud services revenue increased nearly eightfold to $128.8 million in fiscal 2026 from $16.4 million the previous year, while bitcoin mining generated $578.2 million, up 19% year over year.
IREN shares are down 6.3% at $37.96 in pre-market trading on Friday following the results, but remain up 15.8% over the past month and 74.9% over the past year.