More Upside For IREN Stock?

September 2nd, 2025 by Trefis Team
IREN: IREN logo
IREN
IREN

IREN Limited has transformed from a pure Bitcoin mining company into a diversified AI cloud infrastructure powerhouse, delivering exceptional returns of over 150% year-to-date. With Bitcoin trading at $110,000 (+18% YTD) and IREN’s strategic pivot toward AI computing, could the company’s share price double from its current level to exceed $50? It’s certainly possible. We explore the factors that could drive this growth in the sections below. That being said, if you seek an upside with less volatility than holding an individual stock, consider the High Quality Portfolio. It has comfortably outperformed its benchmark—a combination of the S&P 500, Russell, and S&P MidCap indexes—and has achieved returns exceeding 91% since its inception. Separately, see – SoundHound AI: After 6x Gains, What’s Next For SOUN Stock?

Image by MMBA Accountants from Pixabay

Key Catalysts for Stock Doubling

IREN’s stock could double due to a combination of strategic factors, including explosive revenue growth, a potential increase in its valuation multiple, and a rapidly expanding AI cloud business.

  • Explosive Growth and Valuation: IREN’s revenue has grown significantly, reaching $501 million in fiscal 2025, a 168% year-over-year increase. Revenue is projected to triple to around $1.5 billion by 2027, a growth rate that ranks among the fastest in the AI infrastructure sector. While the current valuation of over 11x revenue seems high, it is justified by this rapid growth. As revenue scales, maintaining the current stock price would imply a dramatic and unlikely multiple compression to under 4x. A more reasonable valuation of 8x revenue on 2027 projections would support a stock price exceeding $50. Notably, our previous analysis highlighted why IREN’s lofty valuation was justified and predicted continued upside—since then, the stock has delivered an additional 45% gain.
  • Expanding AI Cloud Business: The company’s AI cloud services are a primary growth driver. IREN plans to expand its fleet of NVIDIA GPUs to 10,900 by December 2025, including next-generation Blackwell B200 and B300 architectures. This expansion, combined with near 100% GPU utilization and EBITDA margins exceeding 50%, promises exceptional profitability.
  • Strategic Advantages and Infrastructure: IREN’s partnership with NVIDIA, which grants it preferred partner status, ensures access to the latest hardware in a supply-constrained market, giving it a significant competitive advantage. The company also has a massive infrastructure pipeline, including the 50MW Horizon 1 liquid-cooled data center and the transformative 1,400MW Sweetwater 1 facility. These projects, along with a planned 600 MW Sweetwater 2 facility in West Texas, will establish IREN as a major player in the AI infrastructure space.
  • Competitive Cost Structure: The company’s vertically integrated energy model provides a significant competitive advantage, with power costs averaging just $0.03845 per kilowatt-hour, one of the lowest globally. This not only ensures superior margins but also appeals to ESG-conscious AI companies due to its 100% renewable power sourcing.

Risk Factors That Could Hamper This Growth

Despite IREN Limited’s impressive growth, several risk factors and potential headwinds could impact its future performance. These include its history of volatility, market dependency, and the challenges of a rapidly evolving technology sector.

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  • Historical Volatility and Bitcoin Dependency: IREN’s stock has a history of extreme volatility, as seen in its 95.7% drop from its 2021 peak to its 2022 low. This shows the stock’s vulnerability to broader market downturns and its historical ties to the volatile crypto market. Even with its pivot to AI, Bitcoin mining still makes up a significant part (97%) of its revenue. A prolonged decline in Bitcoin’s price below $80,000 could severely impact cash flow and jeopardize expansion plans.
  • AI Market Competition and Obsolescence: While the AI cloud market is booming, it’s also highly competitive. Hyperscalers like Amazon (AWS), Microsoft (Azure), and Google (Cloud) are building their own infrastructure, which could lead to margin compression and limit IREN’s growth. The rapid pace of innovation in AI hardware also presents a risk, as current GPU investments could become obsolete faster than anticipated, requiring continuous capital investment to stay competitive.
  • Execution and Valuation Risk: IREN’s ambitious infrastructure development, including its massive data center projects, carries significant execution risk. Any delays in construction or equipment delivery could negatively affect revenue projections and investor confidence. Additionally, the company’s valuation of more than 11x revenue is a significant premium. If it fails to meet its high growth targets, the stock could face substantial multiple compression.

Investment Verdict

IREN presents a compelling investment case, offering dual exposure to both the continued growth of Bitcoin and the explosive expansion of AI infrastructure. The company’s strategic shift from a pure Bitcoin miner to an AI cloud service provider, bolstered by its low-cost energy advantage and strategic partnership with NVIDIA, creates multiple avenues for significant value creation.

The mathematical case for the stock price doubling is straightforward: with revenue projected to triple by 2027, even a modest compression of the current valuation multiple could still lead to a stock price exceeding $50.

However, investors must be aware of the significant risks. IREN’s history of extreme volatility is a clear reminder of its downside potential. The company’s continued reliance on Bitcoin mining and its exposure to the highly competitive and rapidly evolving AI market make this a high-risk, high-reward investment.

There always remains a meaningful risk when investing in a single, or just a handful, of stocks. Consider the Trefis High Quality (HQ) Portfolio which, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics.

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