Shares of IREN (IREN) experienced a significant increase of 10% following the company’s announcement of securing new multi-year AI cloud service contracts with major artificial intelligence firms. This strategic move involves the deployment of Nvidia’s Blackwell GPUs, a cutting-edge technology designed to enhance data processing capabilities.
IREN has successfully finalized contracts for 11,000 of the 23,000 Nvidia GPUs it plans to deploy, translating to approximately $225 million in annual recurring revenue (ARR) from its AI Cloud services. The company anticipates having these GPUs fully operational by the end of 2025, marking a substantial expansion of its cloud service offerings.
The Nvidia Blackwell GPUs, which are set to be contracted ahead of their delivery, feature an average term of two years. This pricing structure is designed to ensure a highly efficient revenue payback period of just two years, bolstering the financial outlook for IREN.
Currently, IREN aims to reach an annualized run-rate revenue exceeding $500 million by 2026, thanks to the 23,000 GPUs either currently deployed or on order. This projected revenue milestone reflects the company’s strong growth trajectory in the rapidly evolving AI market.
In addition to its current capabilities, IREN is preparing for considerable future growth. The company is expanding its operations in British Columbia while also constructing new Horizon 1 and 2 data centers in Childress, Texas. These developments will provide capacity for over 100,000 GPUs, significantly enhancing IREN’s ability to meet the growing demands of AI computing.
With an extensive portfolio of 2,910 MW of power and land resources, IREN stands in a strong position to capitalize on future market opportunities in the AI compute sector. Daniel Roberts, Co-Founder and Co-CEO of IREN, voiced his confidence in the company’s strategic advantages, stating, “With nearly 3GW of grid-connected power across North America and a cloud services business scaling in size and reputation, we believe IREN is well-positioned to scale with the rapid growth in AI compute needs.”
On Wall Street, analysts maintain a Moderate Buy consensus rating on IREN stock, attributing this to a mix of recent assessments—eight Buys, three Holds, and one Sell over the past three months. However, the average price target for IREN shares stands at $47.30, indicating a potential downside risk of approximately 24.65%. This presents a cautious outlook despite the recent uptick in share value following the announcement of new contracts.
