From Bitcoin to AI: IREN's Pivot Could Deliver 128% Upside, Says Bernstein

Bernstein analysts have slashed their price target on IREN from $125 to $100 per share, but the stock remains their top pick among AI-focused Bitcoin miners. The reduction reflects a scaling back of Bitcoin mining and share dilution, not a deterioration in AI prospects.

Key Highlights:

• Massive Microsoft Deal: IREN has contracted 77,000 of its 150,000 GPUs to Microsoft under a five-year deal worth ~$1.94 billion in annualized revenue. Another $400 million in contracts are already signed for on-demand cloud customers.

• Financing Secured: A $5.8 billion purchase agreement with Dell for Nvidia GB300 processors and $3.6 billion in GPU-backed financing at sub-6% interest, plus Microsoft prepayments, cover ~95% of capital needs for the Microsoft contract.

• Revenue Projections: Bernstein forecasts AI cloud revenues of $2.6 billion in 2027 and $6 billion by 2030, when IREN expects to operate 275,000 GPUs. Adjusted EBITDA margins could reach ~82%, implying nearly $5 billion in EBITDA by 2030.

• Power Holdings: IREN's 4.5 GW of power capacity across Texas, British Columbia, and Oklahoma underpins growth. Undeveloped capacity in Sweetwater and Oklahoma is valued at $3 million per MW, contributing ~$10.8 billion to valuation.

• Bitcoin Mining Phasing Out: Bernstein assigns zero value to Bitcoin mining in its model, expecting IREN to fully exit mining by 2030 as it repurposes infrastructure for AI.

Market Context: IREN shares recently traded at $43.78, down 9% amid a broader AI sell-off, but up nearly 25% over the past month. Bernstein's price target implies ~128% upside.

Disclaimer: This content is for informational purposes only and does not constitute investment advice.