Bernstein analysts have reduced IREN's price target from $125 to $100 per share, citing the company's pivot from Bitcoin mining to AI cloud services. Despite this adjustment, the firm maintains an 'Outperform' rating, positioning IREN as a top pick among AI-focused miners.
The strategic shift is underpinned by a substantial five-year contract with Microsoft, valued at approximately $1.94 billion in annualized revenue. This deal leverages 77,000 of IREN's 150,000 GPUs. The remaining GPU capacity is slated for on-demand cloud customers, with $400 million in contracts already secured.
Bernstein projects substantial growth in IREN's AI cloud segment, forecasting revenues to reach $2.6 billion by 2027 and $6 billion by 2030. At scale, with an anticipated fleet of 275,000 GPUs, the company is expected to achieve adjusted EBITDA margins near 82%, potentially generating nearly $5 billion in earnings before interest, taxes, depreciation, and amortization by the decade's end.
This transition will see Bitcoin mining operations fully wind down in the coming years, with zero value assigned to this segment in Bernstein's updated model. The firm expects mining revenue to decline significantly before ceasing by fiscal year 2030. IREN shares recently traded down over 9%, influenced by a broader market downturn in AI-related stocks, though they have gained nearly 25% over the past month.