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IREN stock (NASDAQ: IREN), one of the largest publicly traded Bitcoin miners that shifted focus to AI cloud computing, has become one of the hottest stocks of 2025, skyrocketing over four times year-to-date to approximately $51. IREN benefits from numerous advantages, such as solid growth, cost efficiencies, and a robust inventory of high-performance GPUs that are increasingly essential in the AI era. So, what is the future direction for the stock?
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Competitive Advantages: Ownership of Land, Power, and Data Centers
Situated in Australia, IREN functions as a vertically integrated data center enterprise with facilities located in Canada and Texas. Unlike many competitors that lease their power or infrastructure, IREN fully owns its land, energy resources, and data centers. This complete ownership provides long-term cost management, enhanced scalability, and considerably lower execution risks compared to rivals reliant on external partners. The firm manages about 3 GW of secured low-cost power capacity and possesses a significant land bank for future growth.
The combination of owned power and land serves as a vital differentiator—certain newly constructed data centers outfitted with the latest GPUs remain unused or significantly underutilized due to insufficient power availability. IREN’s secured energy and real estate address this limitation, granting it a structural advantage in both Bitcoin mining and the rapidly expanding AI cloud infrastructure market. Energy expenses are crucial in both Bitcoin mining and AI cloud computing. IREN benefits from some of the lowest energy costs in the industry at approximately U.S. $0.033 per kWh, with all operations powered entirely by renewable energy sourced from British Columbia’s hydropower and Texas’s wind resources.
Increasing Interest In Infrastructure As A Service
A growing trend is emerging toward infrastructure as a service (IAAS), as businesses seek scalable data centers to accommodate the rising demand for artificial intelligence computing capacity. In October, Microsoft and IREN unveiled a $9.7 billion partnership extending through 2031 that grants Microsoft access to Nvidia’s G8300 GPUs. These agreements may become more frequent moving forward for several reasons. Investors in major tech companies are growing concerned about their returns on investments concerning the substantial capex these firms are undertaking, considering that constructing data centers from scratch is incredibly capital-intensive and has lengthy lead times.
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Through IaaS agreements, companies can quickly and efficiently add AI-capable computing capacity. By opting for IaaS deals, organizations prevent tying up balance-sheet capital in fixed assets and instead classify computing as an operating expense, thus preserving cash for share buybacks, R&D, or dividends while still meeting the soaring demand for AI. Furthermore, IaaS allows for rapid and flexible scaling. Partners like IREN already possess low-cost power, land, and liquid-cooled facilities, enabling them to potentially deploy tens of thousands of GPUs within months instead of years. This capability is immensely advantageous in a swiftly changing and unpredictable market.
Robust Growth Justifies Valuation?
The stock is currently priced at about 57x forward earnings and around 14x forward sales. These multiples indicate IREN’s strong growth potential, but they also emphasize that investors are paying a premium for expected future growth. For additional details, visit: IREN Valuation Ratios
Growth has surged significantly. Revenues increased from just $60 million in FY’22 to around $501 million in fiscal FY’25. Q1 FY26 results, released in October 2025, surpassed expectations, with revenues soaring 355 percent year-over-year to $240.3 million and net income reaching $384.6 million, propelled by gains on financial instruments. Consensus estimates forecast over 125 percent growth for fiscal 2026 and about 95 percent in 2027, pushing revenues above $2.3 billion by FY’27. This degree of acceleration provides vital support for the elevated valuation.
Such growth is being bolstered by a rapid expansion of the company’s GPU infrastructure. As of Q1 FY26, the business operated roughly 23,000 GPUs and plans to expand this fleet to around 140,000 GPUs by the end of 2026 as part of its aggressive AI Cloud growth strategy. The company also has ample power capacity to supply its data centers. As of the last fiscal year, its data centers required about 810 MW of power, compared to its control of about 3 GW (3,000 MW) of supply.
The combination of GPU expansion and secured power capacity positions IREN to continue scaling cloud computing without encountering supply limitations. The company concluded the quarter with $1.8 billion in cash and equivalents, supported by a $1 billion zero-coupon convertible note issued last month and $400 million in GPU financing. This robust capital position offers flexibility as the company moves forward with its large-scale expansion.
Management now forecasts $3.4 billion in AI Cloud annual recurring revenue by the end of 2026 – a remarkable increase from the $500 million plus in run-rate cloud revenues observed in Q1 FY26.
Despite numerous advantages, risks persist. The sector is fiercely competitive, with established cloud providers and other crypto miners competing for market share. Notable execution risks are also present. Although IREN has significant contracts with prominent names and a large power portfolio, constructing large data centers entails numerous challenges, including managing construction delays, obtaining local permits, ensuring adequate cooling capacity, and integrating thousands of GPUs into stable, high-availability clusters.
Additionally, the generative AI market might be experiencing a “fear-of-missing-out” phase, where demand for computing resources is temporarily heightened. Over time, as investors in AI enterprises increasingly focus on returns on investment and cost efficiencies, the growth in demand for computing could stabilize, potentially applying pressure on margins and limiting potential gains for companies like IREN.
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