What’s Happening With IREN Stock?
IREN stock (NASDAQ: IREN), the largest publicly traded Bitcoin miner which pivoted toward AI cloud compute, has been one of 2025’s hottest stocks, soaring nearly fourfold year-to-date to around $42. However, the momentum faltered on Friday, with the stock sliding nearly 10% after JPMorgan downgraded the stock to underweight from neutral, effectively calling it a sell. Despite the bearish call, we believe that IREN has a quite a bit going for it, including solid growth, cost advantages, and a large stock of high-end GPUs which are becoming crucial in the AI age. So where does the stock go from here?
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Energy, Land, And GPUs
Based in Australia, IREN operates as a vertically integrated data center company with facilities in Canada and Texas. The stock’s rally this year has been driven by a bold strategic pivot from being a pure-play crypto miner into becoming an artificial intelligence (AI) cloud infrastructure provider. There are several unique aspects to IREN’s business model. Unlike many rivals that lease power or infrastructure, IREN owns its land, energy sources, and data centers outright, which provides long-term cost control and scalability advantages.
Energy costs are critical in Bitcoin mining, and IREN has some of the lowest power costs among its peers. All of its operations are powered entirely by renewable energy. This setup not only reduces costs in electricity-heavy businesses like Bitcoin mining and cloud computing, but also appeals to ESG-focused investors as well as regulators. The company strategically places its facilities in regions with abundant or excess electricity supply, such as British Columbia with its surplus hydropower and wind-heavy Texas, providing a structural competitive edge. With an average electricity cost estimated at just U.S. $0.033 per kilowatt-hour, IREN is positioned among the lowest-cost operators in the industry.
Its dual business model defines the investment case: Bitcoin mining delivers steady, reliable cash flow, while AI cloud services provide significant upside potential. Originally a cryptocurrency miner, IREN is now leveraging its GPU infrastructure to expand into AI, with management targeting about $500 million in run-rate cloud revenues by Q1 2026.
High Growth Justifies Valuation?
Growth has accelerated dramatically. Revenues rose from just $60 million in FY’22 to around $501 million in fiscal FY’25, and consensus estimates project more than 120% growth each year over fiscal 2026 and 2027, taking sales to over $2.45 billion by FY’27. This growth is being supported by a quick scale up of the company’s GPU infrastructure. The company recently expanded its AI Cloud capacity to about 23,000 GPUs and has orders for an additional 12,400 GPUs at a cost of about $674 million. The company also has a substantial land bank and also controls about 3 gigawatts of low-cost power capacity (while operating about 810 MW of data center capacity) and this positions it differently from miners reliant on external partners.
The stock currently trades at roughly 43x forward earnings and about 10x forward sales. While these multiples reflect IREN’s robust growth prospects they also highlight the premium investors are paying for future growth. The sector remains highly competitive, with established cloud providers and other crypto miners vying for market share. Besides this, the execution risks are also notable. Moreover, the generative AI market may be in a “fear-of-missing-out” phase, where demand for compute is temporarily elevated. Over time, as investors in AI companies increasingly prioritize returns on investment and cost efficiencies, compute demand growth could level off, potentially putting pressure on margins and limiting upside for companies like IREN.
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