From Bitcoin to AI: IREN's GW-Scale Platform Engineered for Hyperscalers
IREN is transitioning from Bitcoin mining to AI and HPC data center infrastructure, leveraging energy assets for higher-margin growth. AI services revenue surged 137% quarter-over-quarter to $17.3 million, with 86% gross margins, while Bitcoin revenue declined. The company projects $3.4 billion in 2026 ARR, with $2.3 billion already under contract, anchored by a major Microsoft deal. IREN plans to expand to 4.5 GW of installed capacity, including 2 GW in Texas (Sweetwater) and 1.6 GW in Oklahoma. This positions it as the largest infrastructure provider among crypto miners transitioning to AI hosting. Microsoft’s $9.7 billion contract, using 10% of projected capacity, highlights IREN’s strategic advantage and potential for additional hyperscaler deals. IREN faces execution risks, including capital costs and Bitcoin price volatility, which could impact short-term margins. However, strong cash reserves ($3.26 billion) and a 147.3% forward revenue growth rate support long-term potential. The stock trades at 30x earnings, near industry averages, with a Strong Buy rating based on its infrastructure leadership and AI revenue momentum.