IREN Limited (IREN) shares declined 3.3% on Thursday, closing at $43.87. The drop came despite co-CEO Daniel Roberts sharing remarks from investor meetings at Goldman Sachs' technology conference in San Francisco, where he noted the company had completed operational challenges.
Roberts indicated that market sentiment has shifted significantly. Investors are no longer motivated by major contract announcements and instead demand evidence of delivered capacity. He stated that deals worth $20 billion to $40 billion no longer guarantee investor confidence, as such contracts often represent cheap options on capacity for customers and fundraising mechanisms for young providers.
Revenue Versus Contracted Capacity
IREN, which transitioned from Bitcoin mining to building data centers that rent computing power to AI model training companies, reported $70.5 million in AI cloud revenue for the June quarter. The company claims approximately $1 billion in operating annualized run rate from current contracts, though this revenue has not yet been formally recorded.
An additional $4 billion in contracted capacity is scheduled for 2026, but none of this will appear in reported revenue until facilities are operational and customers formally accept them.
Roberts acknowledged the central debate affecting the stock's valuation: the gap between the $71 million in quarterly AI cloud revenue and the $1 billion annualized operating run rate claims. He attributed some disappointment in the previous quarter to ramp assumptions that exceeded company guidance.
Delivery Timeline and Analyst Outlook
Microsoft accepted Horizon 1, a 50 megawatt facility, in August under a $9.7 billion five-year agreement. Three additional sites are expected to come online before year end.
Despite the stock's decline, ten analysts maintain an average price target of $75.67, representing approximately 72% upside from Thursday's close. The stock has not reclaimed the $47 level flagged as necessary to confirm the AI trade thesis, reaching $45.37 on Thursday morning before retreating.
