NASDAQ:IREN – Power-Backed AI Infrastructure With 3 GW Of Capacity
Core Shift At NASDAQ:IREN From Bitcoin Miner To AI Infrastructure Operator
NASDAQ:IREN has moved from a pure-play Bitcoin miner into a vertically integrated AI infrastructure platform anchored on roughly 3 gigawatts of secured, low-cost, grid-connected power across North America. The stock trades around $42.70, up 13.05% on the day, within a $38.07–$42.75 intraday range and a 52-week band of $5.13–$76.87, giving it a market capitalization close to $14 billion and a forward P/E near 40. Despite that valuation, the income statement still looks like a crypto miner’s: in Q1 FY26, revenue was about $240 million, with roughly 97% from mining and only around $7.3 million from AI cloud services. That legacy mix is the main reason the market is still framing IREN as a cyclical BTC proxy, while the balance sheet, capex plan, and contracts already reflect a pivot toward long-duration power-to-compute for hyperscalers. The operational reality is that IREN is now designing, owning, and running data centers that convert industrial-scale power into GPU capacity for tenants such as Microsoft, while the Bitcoin segment becomes the funding engine rather than the long-term core.
Legacy Bitcoin Mining Economics Still Shape NASDAQ:IREN’s Current P&L
The mining operation at NASDAQ:IREN still matters for near-term cash flow. All-in cash cost per Bitcoin is around $41,000 per coin, supported by efficient hardware near 15 joules per terahash, renewable energy, and vertical integration in power procurement. The company sells mined BTC immediately, so it avoids balance-sheet exposure to coin price swings and converts production straight into operating cash flow. Q1 FY26 marked the fifth consecutive quarter of record revenue, but the headline net income was skewed by a ~$665 million unrealized gain on financial instruments, which is not representative of the underlying run rate. As BTC softened through November and December 2025, margins from mining will likely compress in upcoming quarters, but the more important strategic takeaway is that crypto revenue will become increasingly marginal versus contracted AI data center revenue over the next two to three years. Bitcoin will still add volatility to quarterly numbers, yet the investment case in NASDAQ:IREN is shifting toward hyperscale AI infrastructure, not the BTC cycle.
3 GW Power, Land And Interconnection As The True Moat For NASDAQ:IREN
The core asset behind NASDAQ:IREN is not its GPU fleet but its control over power, land, and grid interconnection. The company controls about 3 GW of secured, low-cost capacity, with the key campuses in West Texas and additional air-cooled capacity in British Columbia. The flagship locations are the 750 MW Childress site and the 2,000 MW Sweetwater hub, which together provide a 2.75 GW footprint in West Texas. These sites were not purchased at 2024–2025 AI-mania pricing; they were accumulated earlier, when interconnection queues were shorter, local permitting pressure was lower, and land valuations were substantially cheaper. In a US market where an estimated $64 billion of data center projects has been cancelled or delayed in the last two years due to grid constraints and local resistance, the bottleneck is no longer GPUs or financing; it is energizable megawatts with firm interconnection rights. IREN already holds multi-hundred-MW, grid-connected, power-rich sites that competitors simply cannot replicate quickly. That power-plus-interconnection stack is the real moat for NASDAQ:IREN and the foundation for its AI infrastructure strategy.
Childress Campus: High-Density Liquid-Cooled Design Pre-Built For Next-Gen GPUs
The Childress, Texas campus is the lead showcase for NASDAQ:IREN’s data center design. The 750 MW site is segmented into four facilities, Horizon 1–4, with the first phase targeting roughly 200 MW of IT capacity. Horizon 1 is engineered for liquid-cooled densities up to 200 kW per rack, which is materially above what current Nvidia GB300 and Blackwell B200 GPUs strictly require. That excess thermal and electrical headroom—on the order of 60–80 kW per rack beyond current usage—means the site can absorb future increases in GPU power draw without tearing out mechanical and cooling infrastructure. For hyperscalers, that architecture stability is crucial: they can deploy current and next-generation GPU clusters on the same footprint without worrying about facility obsolescence. This is why Microsoft’s GPUs are landing in Horizon 1 first and why Microsoft was willing to prepay $1.9 billion. The campus is not just “powered space”; it is a purpose-built power-to-compute converter designed to stay ahead of GPU roadmaps over the full five-year contract horizon.
Sweetwater Hub: 2 GW Of Follow-On Capacity Into 2027 For NASDAQ:IREN
The Sweetwater hub adds a further 2 GW of expansion capacity that will define the second phase of NASDAQ:IREN’s AI ramp. Sweetwater 1, a 1,400 MW substation, is targeting energization around April 2026, while Sweetwater 2, a 600 MW substation, is aiming for late 2027. This capacity will not come online all at once; it will phase in as substations are energized and data halls are commissioned. The key point is the timeline: IREN’s true inflection in AI revenue and cash flow will occur when these substations are fully operational and filled with contracted workloads, which is primarily a 2027 and beyond story. At the same time, IREN has already begun scaling its GPU fleet, announcing the purchase of 4,200 Blackwell B200 GPUs and building a total of about 8,500 Nvidia GPUs as of late 2025. Management targets approximately 140,000 GPUs by late 2026, which today only uses roughly 16% of the 3 GW power portfolio. That underutilization of power indicates large embedded capacity for incremental AI tenants and future expansion once the grid and physical infrastructure are fully energized.
Microsoft’s $9.7 Billion Contract As Hyperscale Validation For NASDAQ:IREN
The five-year, $9.7 billion contract with Microsoft is the structural pivot that turns NASDAQ:IREN from a speculative miner into a hyperscale-grade AI infrastructure vendor. Once fully ramped, management expects the Microsoft deal alone to support roughly $1.94 billion in annualized run-rate revenue with project margins around 85%, which would place IREN among the highest-margin AI infra providers. GPUs and racks for this contract are being deployed through 2026, with most revenue recognition occurring from 2027 onward when the full IT capacity at Childress is live. The deal is anchored physically in Horizon 1 at Childress, where Microsoft gets access to Nvidia GB300 clusters in a liquid-cooled, high-density environment that anticipates future architectures. The $1.9 billion upfront payment—20% of the total contract value—serves as both funding and validation: it shows Microsoft is treating IREN as credible long-term infrastructure, not as a speculative co-location. For context, Microsoft also has a $17.4 billion agreement with another AI infra provider with no upfront capital, underlining that IREN extracted materially better prepayment economics. Parallel to this, IREN has committed to a $5.8 billion purchase from Dell for GPUs and data center hardware, largely funded by the Microsoft prepayment and associated financing, aligning capex tightly with contracted workloads instead of speculative builds.
Financing Structure: Prepayment, Convertibles And Balance Sheet For NASDAQ:IREN
Funding the transition from miner to AI hyperscale operator is capex-heavy, with total investment through 2027–2030 likely exceeding $8–10 billion. NASDAQ:IREN has structured the financing stack around three pillars: the $1.9 billion Microsoft prepayment, long-dated convertible notes, and balance sheet cash plus mining cash flow. Earlier in the transition, IREN issued $1 billion of 0% convertible notes due 2031. In December 2025 it added a $2.3 billion convertible senior notes package, split into $1 billion at 0.25% due 2032 and $1 billion at 1.00% due 2033, with up to $300 million of additional notes if options are exercised. Part of those proceeds was used to repurchase approximately $544.3 million of existing 2029 and 2030 convertible notes that were already in the money, thereby extending maturities and reducing coupons from 3.25–3.5% down to a 0.25–1.0% range. To mitigate future dilution upon conversion, IREN also entered capped call transactions with an initial cap price near $82.24 per share, which should soften dilution up to that level if the equity rerates sharply higher. The equity component of the recapitalization included issuing 39.7 million shares at $41.12, which is painful in the short term but removed near-term refinancing pressure. Overall, the capital structure now reflects long-dated, low-coupon debt secured by contracted cash flows rather than short-term, high-cost leverage, but investors must assume more dilution if additional capex waves or delays require fresh capital. For ongoing ownership and insider behavior, the relevant information is consolidated here: https://www.tradingnews.com/Stocks/IREN/stock_profile and insider flows at https://www.tradingnews.com/Stocks/IREN/stock_profile/insider_transactions.
Valuation Versus Nebius And CoreWeave: Where NASDAQ:IREN Trades Today
At roughly $42.70, NASDAQ:IREN trades at about 24–25x trailing earnings, near 39–40x forward earnings, around 14x price-to-sales, roughly 16x EV/Sales, and close to 50x EV/EBITDA, with YoY revenue growth nearing 235% and a price-to-book ratio around 4x. Short interest sits near 15–16%, which can amplify moves if execution surprises positively. In comparison, Nebius trades near 61x P/S and about 66x EV/Sales, with P/E multiples around 195x trailing and 112x forward, reflecting a premium as a multi-region AI cloud platform with more visible software leverage. CoreWeave sits around 6.5x P/S, about 12x EV/Sales, and approximately 25x EV/EBITDA, but carries higher perceived balance-sheet risk and less owned power and land. IREN is therefore significantly cheaper than Nebius on every revenue-based multiple and valued modestly above CoreWeave despite controlling one of the largest independent power portfolios in North America and having a fully contracted hyperscale anchor in Microsoft. Analysts and internal projections imply that IREN’s P/S multiple should roughly halve by FY27 as revenue grows into the Microsoft and broader AI contracts, potentially moving toward 3x P/S by FY28 if the market cap does not rerate aggressively. If by FY27 the market is willing to pay 7–8x P/S for a company with $3–4 billion of ARR, a fully energized 3 GW power stack, and visible cash flows, upside in the 60–70% range from current levels is a reasonable base case.
Key Risks For NASDAQ:IREN – Execution, Dilution, Commoditization, Bitcoin Exposure
The primary risk at NASDAQ:IREN is execution on hyperscale build-out and contract delivery. The Microsoft agreement contains explicit delivery and timing conditions; failure to meet those milestones could trigger termination or renegotiation, which would severely damage the investment case. While Microsoft has strong incentives to support IREN—given its need for capacity—the risk is binary from an equity perspective: either IREN brings Childress and Sweetwater online on schedule and fills them with GPU clusters, or the stock reprices sharply lower. Dilution is the second major risk. Existing and future convertible notes, plus potential equity offerings, will increase the share count. The December recapitalization already issued nearly 40 million shares, and more equity raises are possible if BTC cash flow weakens or if capex expands beyond the current plan. For dilution to be acceptable, per-share cash flow must grow faster than the share count; that requires the AI ramp to hit both timing and margin targets. A third structural risk is long-term commoditization. Unlike some rivals building proprietary software, ecosystems, and higher-level services on top of compute, IREN is fundamentally a power plus data center plus GPU platform. Over a three- to four-year horizon, scarcity of energizable megawatts will likely protect margins, but over a decade, commodity pricing for raw compute is a real possibility if the market becomes oversupplied or software layers capture most of the value. Finally, Bitcoin exposure remains a near-term source of volatility. Until AI revenue dominates, BTC price swings will continue to affect quarterly results. A prolonged downturn in BTC would reduce the funding buffer precisely when capex needs are highest.
Investment Stance On NASDAQ:IREN – High-Risk Buy On Multi-Year Power-To-Compute Upside
Overall, NASDAQ:IREN now represents a high-risk, high-reward play on grid-constrained AI infrastructure. The company controls approximately 3 GW of secured, low-cost, grid-connected power; owns land and interconnection at scale in West Texas and British Columbia; and has a five-year, $9.7 billion contract with Microsoft that includes a $1.9 billion prepayment and projected project margins near 85%. The December 2025 recapitalization extended debt maturities to 2032–2033 at coupons between 0.25% and 1.0%, materially better terms than peers such as Nebius and CoreWeave and a signal that credit markets view IREN’s contracted cash flows as relatively lower risk. At the same time, the current P&L still looks like that of a Bitcoin miner, and the equity market is discounting the existing AI infrastructure pipeline. If Childress and Sweetwater are energized on schedule, if Microsoft’s revenue ramps to the guided $1.94 billion ARR, and if additional AI tenants fill the remaining capacity, the stock has room to re-rate from today’s 14x P/S and 16x EV/Sales toward peer multiples that already price in hyperscale AI platforms. Given the power and interconnection moat, contracted ARR trajectory, and relative valuation versus Nebius and CoreWeave, the position is justified as a high-risk Buy for investors who can tolerate dilution and volatility in exchange for multi-year asymmetric upside linked to IREN’s 3 GW power-to-compute footprint.
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