IREN has built a 3-gigawatt data center pipeline dedicated to artificial intelligence workloads, driven by long-term commitments from hyperscale clients. In December, the company finalized a $9.7 billion deal with Microsoft for AI cloud capacity, and executives have cited multi-year capital commitment letters from both Microsoft and Meta that exceed $5 billion each. This backlog provides revenue visibility through 2028 and underpins an estimated 45% compound annual growth rate in AI cloud services over the next three years.

Analysts value IREN at a forward price-to-earnings multiple of 50.25x, roughly half the 100x multiple assigned to comparable pure-play AI infrastructure provider Nebius. This discount persists despite IREN’s transition from Bitcoin mining to full AI cloud infrastructure, expanding gross margins—which rose from 32% in Q2 to 38% in Q4—and a rising return on invested capital that reached 14% last quarter. Technical indicators also show strong support around key moving averages, suggesting limited downside ahead of earnings.

For Q2 FY26, consensus expects IREN to report a 60% year-over-year increase in AI cloud revenue, driven by accelerated GPU deployment across its North American and European facilities. However, heavy capital expenditures—projected at $1.8 billion for the quarter—could weigh on free cash flow generation. Management has guided for a sequential uptick in operating income margin to 12%, supported by scale efficiencies from its newly commissioned 200-megawatt AI campus in Texas.