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 IREN's Rising AI Cloud Revenues Offset Bitcoin Mining Weakness?
Read MoreHide Full Article
Key Takeaways
IREN's AI cloud revenues jumped 94.2% sequentially to $33.6M in Q3 FY26.
Bitcoin mining revenues fell 33.6% as IREN converted existing mining facilities into AI infrastructure.
IREN signed a $3.4B NVIDIA AI cloud contract and targets $3.7B ARR by 2026.
IREN Limited (IREN - Free Report) is continuing its transition from Bitcoin mining toward AI cloud infrastructure as demand for GPU capacity remains strong. During the third quarter of fiscal 2026, IREN’s AI cloud services revenues increased 94.2% on a sequential basis to $33.6 million. Management attributed the growth to be driven by rising GPU deployments and increasing customer demand for AI infrastructure. The company believes AI cloud represents a larger long-term opportunity than Bitcoin mining.
Bitcoin mining revenues declined 33.6% sequentially in the third quarter to $111.2 million. Management attributed the decline to lower Bitcoin prices and the ongoing removal of mining hardware ahead of GPU installations. The company is slowly exiting its Bitcoin mining business and is converting several of its existing Bitcoin mining facilities in Texas and British Columbia into AI cloud infrastructure. This bodes well for IREN’s prospects since retrofitting existing air-cooled mining infrastructure is cheaper and faster than constructing new liquid-cooled AI data centers from the ground up.
IREN’s AI cloud business is expanding rapidly. IREN exited the third quarter with $3.1 billion in annual recurring revenues under contract and maintained its target of reaching $3.7 billion ARR by the end of calendar 2026. Further, IREN is targeting 480 megawatts of AI cloud capacity and 150,000 GPUs by the end of 2026. The above-mentioned targets seem achievable as all of IREN's operational AI cloud capacity is fully contracted, and the company continues to see demand for near-term GPU infrastructure exceed available supply.
Another positive is IREN’s recent NVIDIA partnership, where the company signed a $3.4 billion, five-year AI cloud contract with NVIDIA during the third quarter, which is expected to support future growth in AI cloud revenues. As more GPU capacity comes online, AI cloud revenues are expected to become a larger part of IREN’s overall business and help the company offset the weakness arising due to the exit from its Bitcoin mining business.
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 returned 26.4% in the year-to-date period against the Zacks Financial Miscellaneous Services industry’s decline of 9.2%.
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 6.54X compared with the industry’s 2.99X.
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 25 cents per share, revised 29 cents downward over the past 30 days, but marking a substantial year-over-year increase.
View the Zacks #1 Rank List
Image: Bigstock
Can IREN's Rising AI Cloud Revenues Offset Bitcoin Mining Weakness?
Key Takeaways
IREN Limited (IREN - Free Report) is continuing its transition from Bitcoin mining toward AI cloud infrastructure as demand for GPU capacity remains strong. During the third quarter of fiscal 2026, IREN’s AI cloud services revenues increased 94.2% on a sequential basis to $33.6 million. Management attributed the growth to be driven by rising GPU deployments and increasing customer demand for AI infrastructure. The company believes AI cloud represents a larger long-term opportunity than Bitcoin mining.
Bitcoin mining revenues declined 33.6% sequentially in the third quarter to $111.2 million. Management attributed the decline to lower Bitcoin prices and the ongoing removal of mining hardware ahead of GPU installations. The company is slowly exiting its Bitcoin mining business and is converting several of its existing Bitcoin mining facilities in Texas and British Columbia into AI cloud infrastructure. This bodes well for IREN’s prospects since retrofitting existing air-cooled mining infrastructure is cheaper and faster than constructing new liquid-cooled AI data centers from the ground up.
IREN’s AI cloud business is expanding rapidly. IREN exited the third quarter with $3.1 billion in annual recurring revenues under contract and maintained its target of reaching $3.7 billion ARR by the end of calendar 2026. Further, IREN is targeting 480 megawatts of AI cloud capacity and 150,000 GPUs by the end of 2026. The above-mentioned targets seem achievable as all of IREN's operational AI cloud capacity is fully contracted, and the company continues to see demand for near-term GPU infrastructure exceed available supply.
Another positive is IREN’s recent NVIDIA partnership, where the company signed a $3.4 billion, five-year AI cloud contract with NVIDIA during the third quarter, which is expected to support future growth in AI cloud revenues. As more GPU capacity comes online, AI cloud revenues are expected to become a larger part of IREN’s overall business and help the company offset the weakness arising due to the exit from its Bitcoin mining business.
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 returned 26.4% in the year-to-date period against the Zacks Financial Miscellaneous Services industry’s decline of 9.2%.
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 6.54X compared with the industry’s 2.99X.
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 25 cents per share, revised 29 cents downward over the past 30 days, but 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.