Bitcoin miner IREN (IREN) said this week that it had secured new multi-year AI cloud contracts for Nvidia Blackwell GPU deployments, further strengthening its push to diversify its revenue stream beyond cryptocurrency mining.
IREN’s stock climbed 9% on Tuesday following the announcement.
The company said last month that it has doubled its AI cloud capacity to 23K GPUs after purchasing an additional 12.4K GPUs. It is now targeting $500 million in AI cloud annualized run-rate revenue (ARR) by the first quarter of 2026.
IREN said in a press release that 11K of the 23K GPUs have now been secured through customer contracts thus far. This amounts to roughly $225 million in AI cloud ARR for the company, which is expected to be in operation by the end of 2025.
The company noted that new NVIDIA Blackwell GPUs are being contracted by customers on an average of two years ahead of delivery, which supports an approximately two-year revenue payback.
In a client note at the end of September, Compass Point equity analyst Michael Donovan cited the fact that customers “are pre-contracting capacity ahead of commissioning” as one of the reasons he’s bullish on IREN’s stock.
Donovan maintained a Buy rating on the company, while raising his price target to $50 from $23.
“In a market organizing around multi-cloud-anchoring with hyperscalers while sourcing current-gen GPU capacity from specialists – IREN is moving up the stack into Al Cloud (GPU compute) while open to potential colocation options (from powered shell to turnkey) across British Columbia and Texas,” he said.
A bold bet on the AI boom
Its British Columbia, Canada campuses, along with two data centers under construction called Horizon 1 and Horizon 2, will be able to provide capacity for more than 100K GPUs, the company said.
“Our ability to rapidly transition from ASICs to GPUs across our British Columbia campuses, and the speed at which we’re building Horizon 1 & 2, demonstrates how IREN is uniquely positioned to meet accelerating demand for AI compute” IREN co-founder and CEO Daniel Roberts said in a statement.
“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,” Roberts added.
While IREN’s stock has surged nearly 512% this year, it tumbled this week after announcing an $875 million convertible debt offering
The company said the offering could increase to $1 billion if initial purchasers take up an option to buy an additional $125 million. The notes will be unsecured and give holders the right to convert into IREN shares or cash under certain conditions, with maturity set for July 2031.
IREN’s shares dropped 6% post-market after the announcement on Tuesday, which almost completely erased the gains it made after revealing its new AI cloud contracts.
Investors tend to sour on these debt offerings because if the notes are converted into equity, it can cause dilution for current shareholders.
IREN said that it would be using the proceeds to fund general operations and working capital, and that it capped call transactions in an effort to reduce dilution if the notes are converted into equity.
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