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The Zacks Consensus Estimate for earnings has remained steady at 17 cents per share over the past 30 days. The consensus mark for revenues is pegged at $229.14 million.
Image Source: Zacks Investment Research
IREN has been benefiting from growing bitcoin mining revenues and the AI data center business. IREN’s high fleet efficiency at 15 joules per terahash and low net power costs of $0.035 per kilowatt hour in the previous quarter made the segment profitable. Its efficiency is likely to have supported IREN’s growth in the to-be-reported quarter.
IREN’s AI cloud business is expanding rapidly with NVIDIA (NVDA - Free Report) as the company expanded its AI cloud capacity to 10.9k NVIDIA GPUs after securing NVIDIA Preferred Partner status and $96 million in financing. The new GPUs, including B300 and GB300 models, will be installed at the Prince George campus, enhancing IREN’s AI infrastructure scalability across its 3GW power platform for future growth.
Let’s see how things have shaped up for IREN before this announcement:
Factors to Note for IREN
IREN operates in a highly capital-intensive industry, which is also fast evolving and puts the company in a precarious position where it has to constantly upgrade its infrastructure as the need arises. These factors also lead to a high debt position of approximately $962.8 million in total debt compared with $564.5 million in cash and cash equivalents as of June 30, 2025. This situation is likely to have negatively impacted IREN in the to-be-reported quarter as the company aims to scale its operations. However, not everything is gloom and doom for the company.
IREN’s fiscal first-quarter performance is expected to have benefited from higher bitcoin revenues. In July and August, IREN reported monthly revenues of $83.6 million and $76.7 million, respectively, from bitcoin mining. Realizations through bitcoin pricing have jumped in the to be reported quarter. Revenues from each Bitcoin mined were $114,891 in July and $114,816 in August.
IREN Limited is one of the world’s largest and lowest-cost bitcoin miners, achieving 400% year-over-year hashrate growth in the fourth quarter of fiscal 2025. IREN achieved its 50 EH/s installed hashrate generating roughly $1 billion annualized hardware profit as reported in the fourth-quarter earnings call.
Strong top-line growth as well as margin expansion for first-quarter fiscal 2025 are expected to have boosted profitability. Hardware profit was $63.3 million in July and $50.8 million in August, up from $49.2 million in June and $47.8 million in May. AI Cloud services revenues were $2.4 million in August, $2.3 million in July, which has been on a constant rise.
IREN Shares Outperform Sector
Shares of IREN have appreciated 589.9% in the year-to-date period compared with the Zacks Financial - Miscellaneous Services industry’s decline of 0.1%.
IREN YTD Performance Chart
Image Source: Zacks Investment Research
IREN Stock is Currently Overvalued
IREN stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.
In terms of forward 12-month price/sales, IREN is trading at 13.84X, higher than the Zacks Financial-Miscellaneous Services industry’s 3.27X.
IREN Forward 12 Months (P/S) Valuation Chart
Image Source: Zacks Investment Research
Investment Thesis for IREN
IREN is benefiting from the rising demand for AI compute infrastructure globally. As the AI adoption among organizations rose from 55% to 78% in a year, IREN recognizes that the main constraint for its growth is not the lack of demand but the availability of compute capacity, creating a strong launch pad for IREN in the AI market, given its infrastructure.
IREN is capitalizing on this opportunity by scaling its vertically integrated data center model, which will allow rapid scaling and position it ahead of competitors amid the global GPU shortage. IREN is also transitioning from Bitcoin mining to AI cloud services, leveraging its low-cost, power-efficient mining operations to fund AI expansion.
IREN’s bitcoin mining business is generating more than $1 billion in annualized revenues at a $36,000 per Bitcoin cost, and this new AI infrastructure opportunity gives IREN a double engine growth story. As an NVIDIA Preferred Partner, IREN gains priority access to advanced GPUs, improving technical integration and customer reach.
However, IREN also faces some challenges in the form of inconsistent hardware profit margin from bitcoin as it transitions toward AI infrastructure. While its hardware profit margin spiked to 76% in July, it declined to 66% in August. IREN also faces competitive pressure from Applied Digital (APLD - Free Report) and TeraWulf (WULF - Free Report) in the AI infrastructure space.
Applied Digital is benefiting from robust demand for data center infrastructure and the growing focus on energy efficiency. Strong spending by hyperscalers, which is expected to be $500 billion in 2027, bodes well for Applied Digital. TeraWulf’s prospects are expected to benefit from its growing footprint in the high-performance computing (HPC) domain, thanks to TeraWulf’s latest joint venture with Fluidstack, a premier AI cloud platform that builds and operates HPC clusters. Growing competition will put more pressure on IREN’s margins.
Conclusion: Sell IREN Stock Now
IREN’s long-term prospects ride on an expanding GPU fleet and partnership with NVIDIA and its transition from bitcoin miner to AI infrastructure provider. However, this transition comes with challenges of scaling infrastructure and gradual cessation from the profitable crypto business.
IREN’s current dual-revenue structure of AI cloud and Bitcoin mining brings volatility as reliance on Bitcoin profits, which fluctuate, might cause difficulty in funding AI expansion. Furthermore, stiff competition from existing AI infrastructure players, including Applied Digital and TeraWulf, and stretched valuation make IREN stock risky right now.
Image: Bigstock
Should You Buy, Sell or Hold IREN Stock Ahead of Q1 Earnings?
Key Takeaways
IREN Limited (IREN - Free Report) is set to release first-quarter fiscal 2026 results on Nov. 6.
The Zacks Consensus Estimate for earnings has remained steady at 17 cents per share over the past 30 days. The consensus mark for revenues is pegged at $229.14 million.
Image Source: Zacks Investment Research
IREN has been benefiting from growing bitcoin mining revenues and the AI data center business. IREN’s high fleet efficiency at 15 joules per terahash and low net power costs of $0.035 per kilowatt hour in the previous quarter made the segment profitable. Its efficiency is likely to have supported IREN’s growth in the to-be-reported quarter.
IREN’s AI cloud business is expanding rapidly with NVIDIA (NVDA - Free Report) as the company expanded its AI cloud capacity to 10.9k NVIDIA GPUs after securing NVIDIA Preferred Partner status and $96 million in financing. The new GPUs, including B300 and GB300 models, will be installed at the Prince George campus, enhancing IREN’s AI infrastructure scalability across its 3GW power platform for future growth.
Let’s see how things have shaped up for IREN before this announcement:
Factors to Note for IREN
IREN operates in a highly capital-intensive industry, which is also fast evolving and puts the company in a precarious position where it has to constantly upgrade its infrastructure as the need arises. These factors also lead to a high debt position of approximately $962.8 million in total debt compared with $564.5 million in cash and cash equivalents as of June 30, 2025. This situation is likely to have negatively impacted IREN in the to-be-reported quarter as the company aims to scale its operations. However, not everything is gloom and doom for the company.
IREN’s fiscal first-quarter performance is expected to have benefited from higher bitcoin revenues. In July and August, IREN reported monthly revenues of $83.6 million and $76.7 million, respectively, from bitcoin mining. Realizations through bitcoin pricing have jumped in the to be reported quarter. Revenues from each Bitcoin mined were $114,891 in July and $114,816 in August.
IREN Limited is one of the world’s largest and lowest-cost bitcoin miners, achieving 400% year-over-year hashrate growth in the fourth quarter of fiscal 2025. IREN achieved its 50 EH/s installed hashrate generating roughly $1 billion annualized hardware profit as reported in the fourth-quarter earnings call.
Strong top-line growth as well as margin expansion for first-quarter fiscal 2025 are expected to have boosted profitability. Hardware profit was $63.3 million in July and $50.8 million in August, up from $49.2 million in June and $47.8 million in May. AI Cloud services revenues were $2.4 million in August, $2.3 million in July, which has been on a constant rise.
IREN Shares Outperform Sector
Shares of IREN have appreciated 589.9% in the year-to-date period compared with the Zacks Financial - Miscellaneous Services industry’s decline of 0.1%.
IREN YTD Performance Chart
Image Source: Zacks Investment Research
IREN Stock is Currently Overvalued
IREN stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.
In terms of forward 12-month price/sales, IREN is trading at 13.84X, higher than the Zacks Financial-Miscellaneous Services industry’s 3.27X.
IREN Forward 12 Months (P/S) Valuation Chart
Image Source: Zacks Investment Research
Investment Thesis for IREN
IREN is benefiting from the rising demand for AI compute infrastructure globally. As the AI adoption among organizations rose from 55% to 78% in a year, IREN recognizes that the main constraint for its growth is not the lack of demand but the availability of compute capacity, creating a strong launch pad for IREN in the AI market, given its infrastructure.
IREN is capitalizing on this opportunity by scaling its vertically integrated data center model, which will allow rapid scaling and position it ahead of competitors amid the global GPU shortage. IREN is also transitioning from Bitcoin mining to AI cloud services, leveraging its low-cost, power-efficient mining operations to fund AI expansion.
IREN’s bitcoin mining business is generating more than $1 billion in annualized revenues at a $36,000 per Bitcoin cost, and this new AI infrastructure opportunity gives IREN a double engine growth story. As an NVIDIA Preferred Partner, IREN gains priority access to advanced GPUs, improving technical integration and customer reach.
However, IREN also faces some challenges in the form of inconsistent hardware profit margin from bitcoin as it transitions toward AI infrastructure. While its hardware profit margin spiked to 76% in July, it declined to 66% in August. IREN also faces competitive pressure from Applied Digital (APLD - Free Report) and TeraWulf (WULF - Free Report) in the AI infrastructure space.
Applied Digital is benefiting from robust demand for data center infrastructure and the growing focus on energy efficiency. Strong spending by hyperscalers, which is expected to be $500 billion in 2027, bodes well for Applied Digital. TeraWulf’s prospects are expected to benefit from its growing footprint in the high-performance computing (HPC) domain, thanks to TeraWulf’s latest joint venture with Fluidstack, a premier AI cloud platform that builds and operates HPC clusters. Growing competition will put more pressure on IREN’s margins.
Conclusion: Sell IREN Stock Now
IREN’s long-term prospects ride on an expanding GPU fleet and partnership with NVIDIA and its transition from bitcoin miner to AI infrastructure provider. However, this transition comes with challenges of scaling infrastructure and gradual cessation from the profitable crypto business.
IREN’s current dual-revenue structure of AI cloud and Bitcoin mining brings volatility as reliance on Bitcoin profits, which fluctuate, might cause difficulty in funding AI expansion. Furthermore, stiff competition from existing AI infrastructure players, including Applied Digital and TeraWulf, and stretched valuation make IREN stock risky right now.
IREN currently carries a Zacks Rank #5 (Strong Sell), which implies that investors should stay away from the stock right now.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.