IREN Limited (NASDAQ: IREN) is strategically transitioning its business model, leveraging its substantial renewable energy capacity and Bitcoin mining operations to aggressively expand into the high-growth artificial intelligence (AI) cloud infrastructure market. The company projects significant revenue and earnings per share (EPS) gains through fiscal year 2027.

Strategic Pivot to AI Cloud Infrastructure Fuels IREN's Growth

IREN Limited (NASDAQ: IREN) is undergoing a significant strategic transformation, shifting its core business focus from primarily renewable-powered Bitcoin mining to becoming a prominent player in the AI cloud infrastructure sector. This pivot is underpinned by the company's substantial renewable energy capacity and its established data center operations, positioning IREN for accelerated revenue and earnings per share (EPS) growth through fiscal year 2027.

The Event in Detail: Dual Growth Engines

IREN is rapidly evolving from a low-cost Bitcoin mining firm to an AI cloud infrastructure rival, leveraging its existing assets to capture opportunities in both domains. The company currently operates a 50 EH/s Bitcoin mining fleet with 810 MW of data center capacity, which generated $501 million in revenue for fiscal year 2025. This performance marked a 168% year-over-year increase, transitioning from a net loss in the prior year to a net income of $86.9 million and an EBITDA of $278.2 million.

Crucially, IREN has secured approximately 2.9 GW of contracted renewable power capacity spread across over 2,000 acres, primarily in the U.S. and Canada. This provides a structural growth advantage, allowing for flexible allocation of power between its mining and emerging AI cloud operations. The AI expansion component includes a current deployment of 10,900 NVIDIA GPUs, with potential for over 60,000 Blackwell GPUs. This AI Cloud segment is targeting $200–250 million in annualized revenue by December 2025.

Management anticipates revenue to scale from $1.11 billion in fiscal year 2026 to $1.31 billion in fiscal year 2027. Correspondingly, EPS is projected to jump from $1.21 in fiscal year 2026 to $1.99 in fiscal year 2027.

Analysis of Market Reaction: Diversification and Valuation

The market's response reflects a bullish sentiment towards IREN's strategic repositioning. The company's transition into AI infrastructure is significantly diversifying its revenue mix, making it less susceptible to the cyclical volatility inherent in Bitcoin prices. By integrating AI Cloud services, IREN is building a dual-revenue model that balances the cash flow generation of its Bitcoin operations with the aggressive growth potential of AI.

From a valuation perspective, IREN exhibits a forward Price-to-Earnings (P/E) ratio of 21.5x for fiscal year 2026 and 13.1x for fiscal year 2027. This represents a sharp compression from its trailing GAAP P/E of 67x, indicative of accelerated EPS growth. While its forward EV/Sales of 6.8x is more than double the sector median, this premium is justified by its unique position at the nexus of renewable energy, high-performance computing, and AI infrastructure. Its vertical integration, advancements in liquid cooling technologies, and NVIDIA Preferred Partner status further secure its competitive advantage.

Broader Context and Implications: Tapping into the AI Boom

IREN's strategic move aligns with the explosive growth of the global AI cloud market. This market is projected to reach approximately $757.58 billion in 2025 and is forecasted to expand to $3.6 trillion by 2034, exhibiting a compound annual growth rate (CAGR) of 19.2%. This expansion is driven by the increasing adoption of cloud-based AI services across various industries.

IREN's ability to source low-cost, high-block power provides a structural advantage in both Bitcoin compute and AI compute, both of which are power-intensive operations. The company's investment in next-generation, power-dense data centers and direct-to-chip liquid cooling addresses the critical need for efficient infrastructure to support highly demanding AI clusters.

"IREN is uniquely positioned to deliver across the entire AI infrastructure stack—from powered shells to turnkey colocation to fully managed cloud services." - Co-CEO Daniel Roberts

Looking Ahead

IREN's future growth trajectory is tied to the continued development of its AI Cloud and data center facilities. Key projects include the Horizon 1 50MW liquid-cooled AI data center at Childress, on track for Q4 2025, and site works for Horizon 2. The company's Sweetwater hub, a 2GW facility, is advancing with Sweetwater 1 (1.4GW) scheduled for energization in April 2026 and Sweetwater 2 (600MW) in late 2027. These developments are crucial for powering very large AI clusters.

While the company's diversification into AI reduces its dependence on Bitcoin price fluctuations, a significant portion of its projected revenue from mining still relies on a Bitcoin price assumption of $115,000, specific hashrate, and network assumptions. Furthermore, the $200–250 million AI Cloud run-rate for December 2025 is not yet fully contracted, and slower customer ramp-up, pricing pressures, or extended qualification cycles could impact realization. Investors will closely monitor these factors, alongside the company's capital expenditure plans for its multi-gigawatt roadmap and the potential need for further financing. Despite potential near-term volatility, the company's structural growth trajectory into AI and cloud infrastructure presents a compelling long-term investment case.