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IREN's Mining Exit Accelerates: Will AI Cloud Offset the Transition?
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Key Takeaways
IREN's June-quarter mining revenues fell to $66.7M as AI Cloud revenues climbed to $70.5M.
IREN expects mining to be effectively decommissioned by the end of December 2026.
IREN targets over $4B in AI Cloud annualized run-rate revenues by the December quarter.
IREN Limited’s (IREN - Free Report) exit from Bitcoin mining is moving faster than AI Cloud revenues can replace it. In the June quarter, total revenues fell to $137.2 million from $144.8 million sequentially as mining revenues dropped to $66.7 million from $111.2 million, while AI Cloud revenues rose to $70.5 million from $33.6 million.
The shift is clear across the full fiscal year, with AI Cloud revenues climbing to $128.8 million from $16.4 million a year earlier, roughly eightfold, while Bitcoin mining still contributed $578.2 million. Management expects mining operations to be effectively decommissioned by the end of December 2026, speeding the revenue mix change.
That exit carries a cost. IREN posted a $684 million fourth-quarter net loss, driven by $450.4 million of non-cash impairments tied to decommissioned mining hardware, plus a $102.1 million reduction in the fair value of mining equipment held for sale. Charges reflect the cost of converting sites for AI Cloud.
The AI business is scaling quickly. IREN says operating annualized run-rate revenues have reached about $1 billion and expects more than $4 billion by the December quarter, already under contract. Horizon 1, a 50 MW deployment for Microsoft, is live, with Horizons 2 through 4 targeted for delivery in the December 2026 quarter.
However, timing is the main test. Much of December capacity is expected to arrive late, so reported revenues should benefit mainly in March. Full fiscal year 2027 capital spending is guided at $25 billion to $30 billion, making financing and GPU delivery key variables.
IREN’s Peers Accelerate AI Shift as Mining Revenues Fade
Cipher Digital Inc. (CIFR - Free Report) is making a shift from Bitcoin mining toward contracted HPC infrastructure. Cipher Digital reported $24.8 million of second-quarter mining revenues, down from $43.6 million a year earlier, while Black Pearl began generating HPC rent in August. Cipher Digital also targets September delivery at Barber Lake, accelerating revenue diversification.
TeraWulf Inc. (WULF - Free Report) is further along in the transition, with HPC already dominating its revenue mix. TeraWulf generated $31.9 million of HPC lease revenues in the second quarter versus $12.8 million from digital assets. TeraWulf also secured a 20-year, $19 billion Anthropic lease, while Kentucky approved 482 MW for its Justified campus.
IREN’s Price Performance, Valuation and Estimates
Shares of IREN have declined 2.5% so far in the year, underperforming the S&P 500 composite but better than the broader industry.
Image Source: Zacks Investment Research
In terms of forward 12-month Price/Sales (P/S), IREN is currently trading at 3.65X, which is at a premium to the industry average of 2.58X.
Image Source: Zacks Investment Research
Estimates for IREN’s fiscal 2027 and 2028 earnings have been revised downward in the past 60 days.
View the Zacks #1 Rank List
Image: Bigstock
IREN's Mining Exit Accelerates: Will AI Cloud Offset the Transition?
Key Takeaways
IREN Limited’s (IREN - Free Report) exit from Bitcoin mining is moving faster than AI Cloud revenues can replace it. In the June quarter, total revenues fell to $137.2 million from $144.8 million sequentially as mining revenues dropped to $66.7 million from $111.2 million, while AI Cloud revenues rose to $70.5 million from $33.6 million.
The shift is clear across the full fiscal year, with AI Cloud revenues climbing to $128.8 million from $16.4 million a year earlier, roughly eightfold, while Bitcoin mining still contributed $578.2 million. Management expects mining operations to be effectively decommissioned by the end of December 2026, speeding the revenue mix change.
That exit carries a cost. IREN posted a $684 million fourth-quarter net loss, driven by $450.4 million of non-cash impairments tied to decommissioned mining hardware, plus a $102.1 million reduction in the fair value of mining equipment held for sale. Charges reflect the cost of converting sites for AI Cloud.
The AI business is scaling quickly. IREN says operating annualized run-rate revenues have reached about $1 billion and expects more than $4 billion by the December quarter, already under contract. Horizon 1, a 50 MW deployment for Microsoft, is live, with Horizons 2 through 4 targeted for delivery in the December 2026 quarter.
However, timing is the main test. Much of December capacity is expected to arrive late, so reported revenues should benefit mainly in March. Full fiscal year 2027 capital spending is guided at $25 billion to $30 billion, making financing and GPU delivery key variables.
IREN’s Peers Accelerate AI Shift as Mining Revenues Fade
Cipher Digital Inc. (CIFR - Free Report) is making a shift from Bitcoin mining toward contracted HPC infrastructure. Cipher Digital reported $24.8 million of second-quarter mining revenues, down from $43.6 million a year earlier, while Black Pearl began generating HPC rent in August. Cipher Digital also targets September delivery at Barber Lake, accelerating revenue diversification.
TeraWulf Inc. (WULF - Free Report) is further along in the transition, with HPC already dominating its revenue mix. TeraWulf generated $31.9 million of HPC lease revenues in the second quarter versus $12.8 million from digital assets. TeraWulf also secured a 20-year, $19 billion Anthropic lease, while Kentucky approved 482 MW for its Justified campus.
IREN’s Price Performance, Valuation and Estimates
Shares of IREN have declined 2.5% so far in the year, underperforming the S&P 500 composite but better than the broader industry.
Image Source: Zacks Investment Research
In terms of forward 12-month Price/Sales (P/S), IREN is currently trading at 3.65X, which is at a premium to the industry average of 2.58X.
Image Source: Zacks Investment Research
Estimates for IREN’s fiscal 2027 and 2028 earnings have been revised downward in the past 60 days.
Image Source: Zacks Investment Research
Currently, IREN carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.