IREN: Bitcoin Miner With AI Ambitions

Summary IREN is now focusing on building on top of its Bitcoin mining core revenues with AI infrastructure. They’re targeting over $500 million in AI Cloud ARR by Q1 ￰0￱ now, Bitcoin mining remains their main cash ￰1￱ believes that their current economics support a sustainable $1.0 billion ￰2￱ capacity roadmap includes British Columbia with 160 MW, Childress with 50 MW liquid-cooled, and Sweetwater with 2 ￰3￱ is also vertically integrated as it owns the land, power, and data centers across the whole mining (and cloud AI) value chain. So, given its promising growth prospects and solid business fundamentals, I believe its slight premium relative to peers still seems somewhat cheap at these ￰4￱ Limited ( IREN ) is evolving from one of the world’s largest Bitcoin ( BTC-USD ) miners to a next-generation AI infrastructure ￰5￱ mining remains the company’s financial backbone, generating over $1 billion of projected ARR in 2025.

However, IREN has redirected capital toward scaling its AI bare-cloud business. It’s deploying massive GPU facilities across Canada and Texas, with a projected ARR of $500 million by Q1 ￰6￱ initiatives combined are positioning IREN for a major growth phase in the next two years. And, in that context, its valuation multiples seem quite compelling at these levels, which is why I rate the stock a “Buy.” Bitcoin Mining And AI Ramp Up IREN Limited, formerly known as Iris Energy, is a company focused on Bitcoin mining and AI cloud ￰7￱ was incorporated in 2018 and started operating in ￰8￱ is currently headquartered in Sydney, Australia. I previously covered IREN last November, and since then, the stock has appreciated by approximately 289.8%, so I thought it was worthwhile revisiting this ticker.) of installed Bitcoin mining ￰9￱ essentially places IREN among the largest global Bitcoin miners.

However, IREN has paused further Bitcoin mining expansion in the near term to allocate resources toward growing its other business ￰10￱ particular, their new ambitions lie in AI cloud, with a GPU-as-a-service ￰11￱ logic behind this is to position themselves to capture the booming demand for AI computation, and AI cloud services could provide compelling ROI on their ￰12￱ said that, Bitcoin mining remains their core business vertical and contributes the largest revenue portion as of ￰13￱ fact, this year, IREN’s latest earnings call noted they’re projecting to generate over $1 billion in yearly mining revenues with their current ￰14￱ also benefit greatly from having a vertically integrated approach to mining ￰15￱ wholly owns its sites, infrastructure, and operations, while having a large contracted grid connection (2.9 GW overall) to support them.) to serve the Bitcoin network, which requires state-of-the-art ASIC machines to remain ￰16￱ context, ASICs are machines that are designed precisely for Bitcoin ￰17￱ ASICs are also constantly improving, so they tend to become obsolete quicker as more powerful and newer ASIC models are released.

That’s why IREN sees a potentially safer and more predictable business with AI cloud, which could quickly become a significant growth ￰18￱ noted that the AI cloud will actually become their main growth driver in the long run. They’re even raising IREN’s AI cloud annualized run-rate ( ARR ) to a target of $500 million by Q1 ￰19￱ means an increase from $200 million to $250 million targeted in December 2025 to $500 million based on prospective ￰20￱ IREN has British Columbia campuses capable of hosting more than 60k Blackwell ￰21￱ GPUs are in addition to their facilities in Texas, which can host up to 19k Nvidia ( NVDA ) GB300 GPUs. AI-Optimized Campuses Looking forward, IREN also said they’re preparing for a new $670 million order that will double their AI cloud ￰22￱ aims to eventually own 23,000 GPUs after ordering 12.4k GPUs worth $674 ￰23￱ order will give IREN a hardware mix composed of two types of GPUs from Nvidia and ￰24￱ it’s also worth mentioning that they included AMD GPUs in their purchases because IREN wants to reduce its dependency on ￰25￱ diversification should also broaden their customer base because AMD has certain benefits over some types of computation workloads.).

These notes are due by 2030, so I wouldn’t worry much about them yet. Plus, they have a relatively low interest rate of just 3.25%, which also shows management secured favorable terms for this ￰26￱ using those numbers, I estimate IREN’s EV at around $11.8 billion.). For comparison, IREN’s sector peers are only expected to grow their topline by about 7.5%. Thus, if anything, I think IREN remains a compelling investment opportunity at these ￰27￱ fortunately, I calculated that their Q2 2025 was cash flow positive by around $49.2 ￰28￱ that I got that figure by simply adding their quarterly cash flows from operations and ￰29￱ this would suggest IREN’s operations look self-sustainable at this point.

Nevertheless, I do think their main risk is the cost of electricity ￰30￱ IREN’s main cost input is electricity to run its facilities, if this input increases substantially, it would contract its ￰31￱ obviously, as long as Bitcoin mining remains their main revenue source, the price of Bitcoin itself will also be a key variable for their profitability. Currently, their all-in cash cost per Bitcoin mined sits around $35.8 thousand, so with Bitcoin trading at six figures, IREN appears like quite a lucrative ￰32￱ would have to decline massively to threaten IREN’s profitability, and that seems unlikely, but it’s nonetheless a risk worth considering.