Iren Stock: $9.7 Billion Microsoft Contract Drives Analyst Upgrade

TLDR

• Iren Limited landed a $9.7 billion five-year GPU cloud agreement with Microsoft
• Canaccord boosted IREN price target from $42 to $70 while keeping buy rating
• Microsoft will prepay 20% upfront to help Iren purchase Nvidia GB300 GPUs
• Revenue hit $240.3 million last quarter, jumping 355% year-over-year
• Sweetwater 1 facility coming in 2026 represents next major growth opportunity

Iren Limited shares closed down 6.8% on Friday at $62.38. Yet Wall Street remains optimistic about the bitcoin miner’s future.

The company announced a massive five-year, $9.7 billion GPU cloud contract with Microsoft. The deal marks a turning point for Iren as it expands into AI infrastructure.

IREN Limited, IREN

Canaccord Genuity raised its price target on IREN stock to $70 from $42. The firm maintained its buy rating following the Microsoft announcement.

Microsoft will prepay 20% of the contract value. This gives Iren the cash needed to acquire GPUs and build out data center capacity.

The agreement carries a projected 32% levered internal rate of return. Analysts led by Joseph Vafi said the deal could shift investor attention from mining operations to AI.

GPU Supply and Data Center Expansion

Iren will provide Microsoft with Nvidia’s GB300 GPUs from its Horizon data centers in Texas. The Horizon project costs roughly $3 billion to complete.

The Microsoft contract is expected to fund approximately half of the Horizon buildout. Chip availability and power supply remain potential risks, but Microsoft’s upfront payment and credit support help reduce uncertainty.

The deal increases Iren’s annual revenue run rate from $500 million to $2.5 billion once fully operational. By the end of 2026, the company projects ARR will reach $3.4 billion.

In October, Iren secured multiyear contracts covering 11,000 of its 23,000 AI GPUs. Those agreements generated about $225 million in revenue with an average two-year payback period.

Management said it remained on track to lease the remaining 12,000 chips by year-end. The company also raised $1 billion through an oversubscribed convertible notes offering.

Sweetwater Site and Future Growth

The convertible notes featured no coupon and a 42.5% conversion premium. Iren used $56.7 million to buy capped calls that limit dilution and push the effective conversion price above $120.18 per share.

Canaccord highlighted Iren’s two-gigawatt Sweetwater 1 site as the next catalyst. The facility is scheduled to come online in 2026.

Power scarcity continues to drive hyperscaler demand for data center capacity. The broker raised its Sweetwater valuation to $32 per share.

Iren holds contracted land and power for future expansion. The company is in talks to grow beyond its current 23,000 GPUs to as many as 100,000 GPUs.

Last quarter showed revenue of $240.3 million, up 355% year-over-year. The current $2.5 billion ARR only uses about 350 MW of capacity.

Iren has another 2 GW of contracted power at Sweetwater that hasn’t been activated yet. The stock trades at 5 times its 2026 ARR guidance.

Canaccord noted Iren’s scale, low-cost power access, and operational integration as key strengths. These factors position the company to bridge cryptocurrency mining and AI infrastructure markets.

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