IREN's $9.7B Artificial Intelligence Agreement and Profit Jump Fail to Prevent 12% Share Decline
- IREN shares fell 12.37% despite $9.7B Microsoft AI cloud contract and record $240. 3M Q1 revenue, driven by Bitcoin-to-AI pivot. - $384.6M net income turnaround and $662.7M EBITDA highlight transition to vertically integrated AI infrastructure with 3GW renewable-powered data centers. - 140,000 GPU deployment and $1.8B cash reserves contrast with investor concerns over $1B convertible notes, execution risks, and contract dependency. - Microsoft's 10% capacity access with 20% prepayment ($1.9B annualized)
Shares of IREN Limited (IREN) dropped 12.37% after the company released its Q1 FY26 financial results, even though it landed a significant $9.7 billion AI cloud agreement with
IREN’s first-quarter revenue soared 355% from the previous year to $240.3 million, fueled by its shift away from
The expansion strategy features liquid-cooled data centers at its 750MW Childress, Texas campus, with phased rollouts planned through 2026. In British Columbia, 160MW of capacity is being shifted from Bitcoin mining to GPUs by year-end, while the 2GW Sweetwater Hub is set to power up two substations between 2026 and 2027, as noted by Parameter. IREN’s financial position remains strong, with $1.8 billion in cash and equivalents, and $1.0 billion in zero-coupon convertible notes issued in October 2025 to support its growth, Parameter also reported.
Despite these strengths, investors are cautious about increasing operating costs, the risks associated with executing large-scale projects, and the company’s reliance on major contracts like the Microsoft deal, according to an
The recent drop in share price reflects broader market doubts about whether IREN’s rapid expansion can be sustained. While the Microsoft deal affirms its AI infrastructure approach, the company’s ability to stay profitable amid heavy capital spending remains a key concern, as highlighted in a
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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