IREN Stock: IREN is at the Intersection of Two of the Most Powerful Secular Trends

Founded in 2018 by brothers Daniel and Will Roberts, IREN [IREN] has rapidly pivoted from its roots in bitcoin [BTC] mining toward positioning itself as a vertically integrated artificial intelligence (AI) cloud and data center player. Its strategy now emphasizes scaling AI infrastructure, deploying GPU clusters and converting surplus mining power toward high performance computing (HPC) workloads.

As analyst Danil Sereda noted on Seeking Alpha, “IREN is still running both BTC mining and AI Cloud/HPC services, and it’s making them one of the only bottom-line-profitable AI infrastructure plays out there”.

In September, the company announced it had doubled its AI cloud capacity to about 23,000 GPUs with a $674m hardware investment, targeting over $500m in annualized AI cloud revenue by early 2026. The expansion includes GPU inventory from Nvidia [NVDA] and Advanced Micro Devices [AMD], broadening its hardware base.

A core aspect of IREN’s approach is that it runs purely on renewable energy, which gives it one of the lowest power costs in the space.

IREN stock has been on a blinding run year-to-date, and is currently up 458.51%.

OPTO covered the stock in a premium article on Foresight, our Substack channel, back in January 2. We noted then that the firm looked like it had a very healthy runway ahead of it, but no one could have anticipated how far it has come by now.

In recent weeks, however, the IREN share price has pulled back somewhat. Let’s discuss whether this represents a transitory wobble, or the beginning of a more worrying trend.

Recent News: Convertible Debt Offering and NVDA Partnership

In early October, IREN priced a private offering of $875m in convertible senior notes, with an additional $125m available through a 13-day purchase option. The notes carry no regular interest and mature on July 1, 2031, unless redeemed or converted earlier. Each $1,000 note can be converted into 11.6784 ordinary shares, implying a conversion price of about $85.63 per share — roughly a 42.5% premium to IREN’s closing price on October 8, the day of the announcement.

Net proceeds were expected to total about $856.5m, or $979m if the option is fully exercised. The funds will be partly used for capped call transactions to help limit dilution for existing shareholders upon conversion.

This came two days after IREN announced new multi-year cloud service deals with leading AI firms for deployments using Nvidia Blackwell GPUs.

The company has rapidly expanded its AI cloud capacity and remains on track to exceed $500m. At the time of the news, contracts had been secured for roughly 11,000 GPUs, representing about $225m in annual recurring revenue. These deployments were expected to be fully operational by late 2025. IREN said it was on-track for annualized run-rate revenue from its 23,000 GPUs, both active and on order, by the end of Q1 2026.

Iren is set to report earnings on November 25.

Crypto to Cloud: IREN vs HUT vs CORZ

Let’s see how IREN stock lines up against two comparable companies in this frenetic space.

Hut 8 [HUT] is one of North America’s largest digital infrastructure and mining firms, currently pivoting toward HPC and AI cloud services. Following its merger with US Bitcoin Corp, the company gained access to diversified energy assets and greater operational scale. Its strategy mirrors IREN’s — repurposing excess power and data-center capacity for AI workloads — but execution risk remains high.

Meanwhile, recently re-emerged from bankruptcy, Core Scientific [CORZ] operates one of the largest bitcoin mining and digital infrastructure platforms in the US. Like IREN, it’s leveraging its energy-efficient sites and infrastructure expertise to expand into AI hosting. In July, CoreWeave [CRWV] announced a definitive agreement to acquire Core, but recent shareholder opposition could stop the deal in its tracks.

IREN Stock: The Investment Case

The Bull Case for IREN

The Bear Case for Heico

Despite the AI-driven narrative, IREN’s transformation remains risky and capital-intensive. Its mining origins leave it exposed to crypto price volatility, and the shift toward AI hosting requires massive upfront investment with uncertain payback periods. The $875m convertible note adds dilution risk, while high GPU costs and power demands could pressure margins. Competition from established data-center players like Core Scientific and traditional hyperscalers may erode pricing power. With a P/S ratio above 20x, expectations are already lofty, leaving little room for execution missteps. If AI demand growth slows or contracts fail to ramp as projected, IREN’s valuation could quickly deflate.

Conclusion

Iren is certainly in an exciting place right now. Analyst opinion reflects this: of 13 ratings compiled on Yahoo Finance in October, one is a ‘strong buy’ and nine are a ‘buy’, with only one ‘sell’. Still, bleeding-edge tech is always risky, and a major upheaval (such as an extended crash in the BTC price) could spell serious trouble for the stock.