Nvidia, a titan in the technology sector with a staggering market capitalization of $4.7 trillion, remains a crucial player in the rapidly growing artificial intelligence (AI) landscape. The company dominates the production of data center Graphics Processing Units (GPUs), which are essential for training large language models (LLMs) used by some of the world’s leading AI firms. Nvidia’s hold over its clients is further solidified by its proprietary software, creating a significant competitive edge.
However, while Nvidia’s trajectory seems promising, its sheer size may limit the potential for large returns compared to smaller, faster-growing AI enterprises. One such company that has entered the spotlight is IREN, which has seen its stock price surge nearly 150% over the past year, bringing its market valuation to around $14 billion.
IREN, formerly known as Iris Energy, originally focused on Bitcoin mining using renewable energy sources. In a strategic pivot in 2024, the company rebranded and shifted its focus to AI infrastructure, investing heavily in Nvidia’s H100 and H200 GPUs. By 2025, IREN had reallocated its capital and resources towards building AI and high-performance computing (HPC) data centers, significantly downscaling its Bitcoin operations.
One of the key milestones for IREN was securing a monumental 5-year, $9.7 billion AI cloud contract with Microsoft last November. In May, it followed up with a $3.4 billion agreement with Nvidia for AI cloud services. These significant contracts have transformed IREN into a prominent “neocloud” stock, making it an attractive option for both retail and institutional investors, including notable entities like Leopold Aschenbrenner’s AI-focused Situational Awareness hedge fund. Although IREN continues to engage in Bitcoin mining, the majority of its growth narrative now centers around its expanding AI business.
Looking ahead, analysts project robust growth for IREN, anticipating revenue could explode from $510 million in fiscal 2025 to a staggering $6.44 billion by fiscal 2028, driven largely by its deals with Microsoft and Nvidia. Additionally, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) estimates suggest an increase from $270 million in 2025 to approximately $4.89 billion in 2028, with expectations for the company to achieve profitability by that final year.
With an enterprise value of $15.7 billion, IREN appears to be an enticing investment opportunity, currently valued at a multiple of seven to ten times its projected sales and adjusted EBITDA for the coming year. Despite market concerns regarding short-term spending, IREN’s long-term potential could yield significant returns as its AI infrastructure division grows. Moreover, its Bitcoin holdings may regain value if the cryptocurrency market experiences a stabilization phase, adding another layer of potential upside to the investment narrative.
