We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Can NVIDIA Partnership Help IREN Reach $3.7B AI Cloud ARR Target?
Read MoreHide Full Article
Key Takeaways
IREN signed a $3.4B, five-year AI cloud contract with NVIDIA tied to Blackwell GPU deployment.
IREN exited Q3 with $3.1B ARR under contract and reaffirmed its $3.7B ARR target for 2026.
IREN plans to deploy 150,000 GPUs and expand AI cloud capacity to 480 megawatts by 2026-end.
IREN Limited (IREN - Free Report) has entered into a major partnership with NVIDIA to strengthen its AI cloud business. The partnership was announced on the latest earnings call in the third quarter of fiscal 2026, where the company signed a $3.4 billion, five-year AI cloud contract with NVIDIA to deploy Blackwell GPUs across 60 megawatts of air-cooled capacity at its Childress campus in Texas. The above-mentioned contract should contribute around $700 million in annual recurring revenues (ARR).
IREN exited the third quarter with $3.1 billion in ARR under contract and reiterated its target of reaching $3.7 billion in ARR by the end of 2026. Here, growth is expected to accelerate in the second half of 2026 as additional GPU capacity comes online. As of now, all operational AI cloud capacity is already fully contracted, and demand for near-term GPU infrastructure remains higher than available supply, particularly for air-cooled AI capacity scheduled for deployment in late 2026 and early 2027.
To support this growth, IREN plans to expand AI cloud capacity to 480 megawatts through the deployment of 150,000 GPUs by the end of 2026. Further, IREN is converting its existing Bitcoin mining facilities in Texas and British Columbia into AI cloud infrastructure. Here, IREN's Horizon 1, a liquid-cooled data center at Childress, which will support liquid-cooled deployment for GPU commissioning for Microsoft, is already underway, while Horizons 2 to 4 remain on track for completion in 2026.
IREN’s financial results reflect its ongoing shift toward AI cloud services. AI Cloud Services revenues were $33.6 million compared with $17.3 million in the previous quarter, reflecting sequential growth of 94.2%. Here, strong AI infrastructure demand and rising contracted capacity are expected to continue supporting growth in IREN's AI cloud business. The Zacks Consensus Estimate for fiscal 2026 and 2027 indicates revenue growth of around 93.8% and 191.8%, respectively.
IREN Stock Faces Stiff Competition
IREN faces intense competition from Applied Digital (APLD - Free Report) and TeraWulf (WULF - Free Report) in the AI infrastructure space.
In January 2026, Applied Digital announced that it had started construction on Delta Forge 1, a large AI data center campus in a southern U.S. state. Delta Forge 1 is designed to support up to 430 megawatts (MW) of total utility power in its initial phase. This can support up to 300 MW of critical IT load. The goal is to turn available power into usable, high-density AI capacity for large customers.
In February 2026, TeraWulf announced the expansion of its digital and power infrastructure portfolio through the acquisition of two existing sites in Kentucky and Maryland. Together, these two acquisitions add about 1.5 GW of power capacity to the company’s portfolio. With these additions, TeraWulf’s total platform size increases to about 2.8 GW across five sites. These acquisitions support TeraWulf’s strategy of reusing existing energy infrastructure to meet growing power and computing demand.
IREN’s Price Performance, Valuation & Estimates
Shares of IREN have surged 48.6% in the year-to-date period against the Zacks Financial Miscellaneous Services industry’s decline of 6.1%.
IREN YTD Price Return Performance
Image Source: Zacks Investment Research
IREN shares are overvalued, as suggested by the Value Score of F. In terms of forward price/sales, IREN is trading at 6.99X compared with the industry’s 3.0X.
IREN Forward 12 Months (P/S) Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for IREN’s fiscal 2026 earnings is pegged at 55 cents per share, revised up by a penny over the past seven days, and marking a substantial year-over-year increase.
View the Zacks #1 Rank List
Image: Bigstock
Can NVIDIA Partnership Help IREN Reach $3.7B AI Cloud ARR Target?
Key Takeaways
IREN Limited (IREN - Free Report) has entered into a major partnership with NVIDIA to strengthen its AI cloud business. The partnership was announced on the latest earnings call in the third quarter of fiscal 2026, where the company signed a $3.4 billion, five-year AI cloud contract with NVIDIA to deploy Blackwell GPUs across 60 megawatts of air-cooled capacity at its Childress campus in Texas. The above-mentioned contract should contribute around $700 million in annual recurring revenues (ARR).
IREN exited the third quarter with $3.1 billion in ARR under contract and reiterated its target of reaching $3.7 billion in ARR by the end of 2026. Here, growth is expected to accelerate in the second half of 2026 as additional GPU capacity comes online. As of now, all operational AI cloud capacity is already fully contracted, and demand for near-term GPU infrastructure remains higher than available supply, particularly for air-cooled AI capacity scheduled for deployment in late 2026 and early 2027.
To support this growth, IREN plans to expand AI cloud capacity to 480 megawatts through the deployment of 150,000 GPUs by the end of 2026. Further, IREN is converting its existing Bitcoin mining facilities in Texas and British Columbia into AI cloud infrastructure. Here, IREN's Horizon 1, a liquid-cooled data center at Childress, which will support liquid-cooled deployment for GPU commissioning for Microsoft, is already underway, while Horizons 2 to 4 remain on track for completion in 2026.
IREN’s financial results reflect its ongoing shift toward AI cloud services. AI Cloud Services revenues were $33.6 million compared with $17.3 million in the previous quarter, reflecting sequential growth of 94.2%. Here, strong AI infrastructure demand and rising contracted capacity are expected to continue supporting growth in IREN's AI cloud business. The Zacks Consensus Estimate for fiscal 2026 and 2027 indicates revenue growth of around 93.8% and 191.8%, respectively.
IREN Stock Faces Stiff Competition
IREN faces intense competition from Applied Digital (APLD - Free Report) and TeraWulf (WULF - Free Report) in the AI infrastructure space.
In January 2026, Applied Digital announced that it had started construction on Delta Forge 1, a large AI data center campus in a southern U.S. state. Delta Forge 1 is designed to support up to 430 megawatts (MW) of total utility power in its initial phase. This can support up to 300 MW of critical IT load. The goal is to turn available power into usable, high-density AI capacity for large customers.
In February 2026, TeraWulf announced the expansion of its digital and power infrastructure portfolio through the acquisition of two existing sites in Kentucky and Maryland. Together, these two acquisitions add about 1.5 GW of power capacity to the company’s portfolio. With these additions, TeraWulf’s total platform size increases to about 2.8 GW across five sites. These acquisitions support TeraWulf’s strategy of reusing existing energy infrastructure to meet growing power and computing demand.
IREN’s Price Performance, Valuation & Estimates
Shares of IREN have surged 48.6% in the year-to-date period against the Zacks Financial Miscellaneous Services industry’s decline of 6.1%.
IREN YTD Price Return Performance
Image Source: Zacks Investment Research
IREN shares are overvalued, as suggested by the Value Score of F. In terms of forward price/sales, IREN is trading at 6.99X compared with the industry’s 3.0X.
IREN Forward 12 Months (P/S) Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for IREN’s fiscal 2026 earnings is pegged at 55 cents per share, revised up by a penny over the past seven days, and marking a substantial year-over-year increase.
Image Source: Zacks Investment Research
Currently, IREN carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.