IREN's Rally Isn't Over - It's Entering A New Phase

Summary IREN’s stock surged to $60 as it transformed from a Bitcoin miner to a vertically integrated AI infrastructure ￰0￱ 2025 revenue grew 168% to $501 million, with adjusted EBITDA up nearly 400% to $270 million and margins at 54%. The company expanded its AI Cloud fleet from 1,900 to 23,000 GPUs, targeting over $500 million in annualized AI Cloud revenue by ￰1￱ 2.9 GW of secured power at 0.035/kWh, IREN maintains one of the lowest-cost energy bases in the AI ￰2￱ Limited ( IREN ) has achieved one of the most dramatic turnarounds in the digital infrastructure ￰3￱ written off as a Bitcoin mine, the company has transformed itself into a vertically integrated AI infrastructure ￰4￱ stock going from $16 from my first bullish call to $60 indicates more than euphoria in the markets, and implies a re-rating of its very ￰5￱ now plays at the intersection of two short resources defining the AI decade, power and ￰6￱ $501 million in FY2025 revenue and $270 million in EBITDA, it has transformed its mining cash flywheel into an internally funded moat driving one of North America’s largest expansions of ￰7￱ its sharp bull run, IREN remains a buy on pullbacks, as its accelerating AI Cloud growth, low-cost power base, and expanding GPU capacity continue to outpace its valuation ￰8￱ Compute While the World Is Running Out of Power Fiscal 2025 results highlighted the revenue leverage in IREN’s business as revenue rose 168% year-over-year, adjusted EBITDA rose almost 400% , and margins hit 54%.

With the shift in business mix to AI Cloud from Bitcoin mining, profitability will likely increase ￰9￱ workloads are inherently power-dense and margin-intensive, and with average power prices at $0.035/kWh and no third-party colocation charges, incremental GPU additions could maintain high EBITDA ￰10￱ rate of scaling of operations has been ￰11￱ a single year, IREN’s AI Cloud fleet expanded from 1,900 to 23,000 GPUs , 19,000 of which are NVIDIA B200 and B300 and more than 1,000 AMD ￰12￱ deployments form the basis of an objective of more than $500 million annually in AI Cloud revenue by early calendar year 2026, a nearly 20 times increase in twelve ￰13￱ 11,000 GPUs are already under multi-year contracts, locking in an estimated $225 million of recurring revenue by year end ￰14￱ contracted base provides near-term cash visibility while retaining pricing upside in a highly tightening GPU supply environment.

FY25 Results Presentation Behind this growth is IREN’s 2.91-GW energy portfolio across Canada and the United States, of which 810 megawatts are already in ￰15￱ Canadian data centers in British Columbia gain world-class power usage effectiveness close to 1.1 based on inexpensive hydroelectric power, and its enormous Childress and Sweetwater facilities in Texas provide multi-gigawatt scale in energy-rich ￰16￱ importantly, IREN owns its buildings and does not lease, which provides unparalleled power autonomy, and margin control. FY25 Results Presentation These benefits make IREN a structural winner in the AI power ￰17￱ hyperscalers fight over access to the grid and administrators discuss data center energy ceilings, IREN has already contracted the electrons that will power the next cycle of AI ￰18￱ new megawatt deployed directly equates to margin expansion, not cost ￰19￱ infrastructure cost escalation is the new taxation in a sector, IREN is practically immunised.

Eventually, IREN’s rally constitutes the first nod from the market to its renaissance, but not its end. Now, the company finds itself at the nexus of energy, infrastructure, and intelligence, as a power utility as well as a digital compute ￰20￱ the world has a short supply of GPUs and gigawatts, IREN’s control over both may well make it one of the AI decade’s landmark infrastructure ￰21￱ In Innovation And The AI Utility Model Birth Capital discipline to match its ￰22￱ October 2025, IREN issued $875 million of zero-coupon convertible notes due 2031 , which included a 42.5% conversion premium and a $120 capped ￰23￱ transaction essentially issued nearly a billion dollars of debt with no interest cost and minimal dilution, an uncommon achievement in a capital-intensive ￰24￱ with single-digit lease financing on GPUs, IREN has designed something it calls synthetic equity with debt that acts like growth capital but compounds shareholder value instead of devouring ￰25￱ funding approach has engendered a negative-carry growth ￰26￱ mining flows give the liquidity to fund GPU leases, which in turn increase capacity and prospective cash ￰27￱ those AI assets build towards higher usage, they return capital quicker than it’s being deployed.

It’s a snowballing cycle, a unique combination of digital coin monetization and real-world infrastructure scaling. It’s what distinguishes IREN from its rivals that it uses capital so ￰28￱ CoreWeave ( CRWV ) and other private players rely so much on equity dilution and venture debt, IREN growth capital fund supports itself organically, supplemented by mining profits and disciplined ￰29￱ at a $17 billion market cap, IREN’s valuation falls behind in its peer category, which are venture-backed AI infrastructure companies that are listed and command higher revenue multiples and lower operating cash ￰30￱ makes it exceptional is that it combines growth, profitability, and capital efficiency, placing it squarely on the cusp of a new asset class, an AI infrastructure utility.

IREN’s Valuation Appears Rich, But It’s Worth Every Penny Of A New Age Of AI Infrastructure Supremacy IREN’s rise from $16 to $60 does not mark the end of the opportunity, but the beginning of a structural ￰31￱ the energy shortage emerges as the new oil shock and GPUs the new gold rush, IREN has positioned itself as among the few players who will be able to turn electrons into exponential ￰32￱ next page will not be written in hash rate or teraflops, but in megawatts, and between the margins and scale and scarcity. IREN’s valuation multiples are based on historical metrics, but they are a function of the company’s evolution from a cyclical Bitcoin mining company to a growth-oriented AI infrastructure ￰33￱ an EV/sales of 35x and an EV/EBITDA of 88x, IREN quotes well above the sector median, but estimates reveal a different ￰34￱ a projected FY2026 revenue of over $1.0 billion and EBITDA and possible FY2027 EBITDA of over $1.2 billion, forward multiples converge drastically, to EV/Sales below 8x and to EV/EBITDA around 15x, aligning more closely with capital-intensive infrastructure ￰35￱ re-rating path relies on scaling its current 23,000-GPU fleet towards 60,000+ ￰36￱ the next 18–24 months, investors can anticipate valuation rationalization due to compounding cash flow and maturing AI ￰37￱ by YCharts Risks: Ambition Scales Meets Execution Reality Though IREN’s renaissance story is enticing, its aggressive growth brings various risks to the company, including both operational and ￰38￱ greatest near-term challenge rests in execution, as it must scale from leveraging 23,000 to over 60,000 GPUs in a variety of locations and do so while delivering liquid-cooled data centers, infrastructure, and ￰39￱ construction, delivery, or commissioning of GPUs may delay revenue recognition and stress near-term cash ￰40￱ customer concentration also creates risk.

A few AI customers are already the majority of its contracted revenue, and thus the company is exposed if demand slows or renewals are not ￰41￱ GPU financing arrangements, normally 24 to 36 months, need to be tightly aligned with customer contracts to prevent mismatches in liquidity, IREN, having good non-dilutive financing and good balance-sheet flexibility, has strong balance-sheet flexibility. However, its leverage increases if cash conversion slows when it’s undertaking aggressive ￰42￱ the outside, Bitcoin volatility of prices still constitutes an indirect ￰43￱ growth is now AI-led, Bitcoin mining still provides significant cash flow for reinvestment.

A sudden drop in prices of cryptos may limit ￰44￱ but not least, data centre energy use and cross-border GPU supply chain shifts in regulation may disrupt IREN’s cost ￰45￱ discipline in execution and diversification still constitute important de-risking of this hyper-growth ￰46￱ Take For investors, IREN is a very unusual combination of profitability, scalability, and scarcity leadership in the age of ￰47￱ 23,000 GPUs installed, 2.9 GW of contracted power, and over $500 million AI Cloud ARR in sight by 2026, it is transforming into an AI infrastructure ￰48￱ its zero-coupon debt and 0.035/kWh power prices, it builds a stranded ￰49￱ gigawatts and GPUs become increasingly scarce, IREN’s leadership in both places makes it a generational compounder in the AI power economy.