IREN signs $2.8bn in AI cloud contracts, raises ARR target to $4bn

IREN locked in $2.8 billion in AI cloud contracts, pushing its annualized revenue target past $4 billion.

IREN raised its year-end AI Cloud annualized run-rate revenue target to more than $4 billion from $3.7 billion after signing $2.8 billion in multi-year contracts with Microsoft, Nvidia and eight other AI developers, the company said Monday.

"Our vertically integrated AI Cloud platform is scaling at pace," Daniel Roberts, co-founder and co-CEO of IREN, said. "In the past 12 months we have expanded from approximately 3MW of self-built AI Cloud capacity to 480MW being delivered this year."

About 85% of the $4 billion ARR target is now under contract, with customer prepayments covering roughly 45% of associated GPU capital expenditure, reducing IREN's net funding requirement. The company held $7.6 billion in cash as of June 30 and targets 1.2 gigawatts of capacity by 2027, up from 480MW this year. Contracts carry a weighted average term of about four years.

The contract haul confirms IREN's pivot from Bitcoin mining to AI infrastructure at a time when the entire miner-turned-cloud cohort has been repriced sharply lower. IREN shares have fallen 41% over the past month to about $34.67, giving the stock a market cap of roughly $7 billion — roughly in line with its cash position. The question for investors is whether the revenue ramp can outpace the capital spending required to build it.

A Sector Under Pressure

IREN's announcement comes as the broader AI infrastructure group has shed more than a third of its value in weeks. Core Scientific shares fell 26% over the past month, TeraWulf dropped 36% and Applied Digital lost 43%, according to market data. The selloff reflects a valuation reset in high-beta, unprofitable AI-infrastructure names rather than company-specific stumbles.

IREN's customer diversification — spanning hyperscalers Microsoft and Nvidia, search platform Perplexity, robotics developer Figure AI and model builders Together AI, Fluidstack and Fireworks AI — sets it apart from peers with concentrated tenant rosters. Applied Digital, by comparison, depends on just three hyperscale tenants across five campuses, with CoreWeave as its anchor at Polaris Forge 1.

Can the Cash Convert to Revenue?

IREN's bull case rests on converting $3.1 billion in contracted ARR into reported revenue over the next several quarters. The company posted a Q3 FY2026 net loss of $247.8 million on revenue that missed consensus by 34%, highlighting the gap between capacity buildout and earnings generation. With a beta of 4.3 — roughly four times the market — IREN remains one of the most volatile names in the AI infrastructure trade.

The company plans to deploy 50,000 additional GPUs and expects the Microsoft revenue ramp to begin in Q3 FY2026. Sweetwater 1 substation energization is another event to watch. Analysts covering IREN carry a consensus price target of about $80.93, implying roughly 132% upside from current levels, though one analyst rates it a Strong Sell, per data from the coverage universe.

This article is for informational purposes only and does not constitute investment advice.