IREN Shifts From Bitcoin Mining to AI Cloud, Stock Target Adjusted

Irene’s stock rating fell from $125 to $100 per share after analysts highlighted a strategic pivot away from cryptocurrency mining toward large‑scale artificial intelligence services. The downgrade reflects two distinct factors: a reduction in Bitcoin mining operations and the issuance of additional shares, diluting existing ownership.

Core Growth Strategy: Partnership with Microsoft

• Five‑year agreement to supply 77,000 of 150,000 GPUs to Microsoft.
• Expected to generate approximately $1.94 billion in annual revenue.
• Remaining GPUs are sold to other cloud customers, with $400 million in signed contracts already secured by February.

Financing the Expansion

• $5.8 billion deal with Dell for Nvidia GB300 chips.
• Secured $3.6 billion in low‑interest, GPU‑backed financing.
• Combined with Microsoft’s advance payments, these sources cover roughly 95 % of the capital needed for the Microsoft deal.

Forward‑Looking Projections

• Expected earnings before interest, taxes, depreciation, and amortization (EBITDA) by the end of the decade: ~$5 billion.

Power Assets and Valuation

• Owns 4.5 GW of power across Texas, British Columbia, and Oklahoma—critical for long‑term expansion.
• Holds 3.6 GW of unused capacity in Sweetwater and Oklahoma, valued at $3 million per megawatt, adding roughly $10.8 billion to overall valuation.

Bitcoin Mining Decline

• Bitcoin mining, once the primary revenue source, is now valued at zero in the new financial model.
• Analysts predict a gradual replacement of mining rigs with GPU racks, converting existing sites for cloud workloads.
• Mining income is forecast to decline sharply and reach zero by fiscal year 2030.

Industry Context

Other major Bitcoin miners have followed similar paths, with some dropping crypto mining entirely to focus on AI services amid the technology boom.