On Monday, Bernstein analysts revised their price target on IREN downward from $125 to $100 per share while maintaining its status as the top recommendation among AI-focused Bitcoin miners. This adjustment is attributed to IREN’s swift pivot towards becoming a leading AI cloud service provider and an expected complete phase-out of cryptocurrency mining operations in the foreseeable future.
The decision to lower the price target reflects two distinct aspects: a reduction in Bitcoin mining activities and an increase in share count due to recent equity issuances, neither indicating any negative impact on IREN’s AI ambitions. The core positive outlook centers around a significant agreement with Microsoft, where IREN has allocated 77,000 out of its total 150,000 GPUs under a five-year contract worth approximately $1.94 billion annually. The remaining GPU capacity is being offered to cloud customers on-demand, having secured $400 million in contracts by February.
To support this expansion, IREN finalized a $5.8 billion agreement with Dell for Nvidia GB300 processors and obtained $3.6 billion in GPU-backed financing at an interest rate below 6%. Alongside Microsoft’s prepayments, these arrangements cover nearly 95% of the capital required for the Microsoft contract, according to analysts.
Bernstein anticipates that IREN’s AI cloud revenues will hit $2.6 billion by 2027 and grow to $6 billion by 2030, when it plans to operate a fleet of 275,000 GPUs—up from its current 150,000. The firm expects adjusted EBITDA margins to stabilize around 82% at scale, translating into nearly $5 billion in earnings before interest, taxes, depreciation, and amortization towards the decade’s end.
IREN’s power assets, spanning Texas, British Columbia, and Oklahoma with a total of 4.5 gigawatts, underpin its long-term growth potential. Bernstein values IREN’s undeveloped capacity at Sweetwater and Oklahoma at $3 million per megawatt for the 3.6 gigawatts involved, contributing about $10.8 billion to the firm’s sum-of-the-parts valuation.
In the revised model, Bitcoin mining—once central to IREN’s operations—is considered valueless. Analysts predict that as IREN continues swapping mining equipment with GPU racks and repurposes its infrastructure for cloud workloads, mining revenue will significantly decline over time, reaching zero by fiscal year 2030.
Several other well-known Bitcoin mining firms have recently embraced AI opportunities, with a few even ceasing crypto mining amid the rise of AI. Despite IREN shares dropping over 9% to $43.78 due to an AI stock downturn linked to reports of OpenAI’s underperformance, they had surged by nearly 25% in the past month. At this price point, Bernstein’s target suggests a potential upside of approximately 128% for investors.