IREN’s Rally Isn’t Over — It’s Entering a New Phase

At first glance, IREN’s stock performance in 2025 reads like a high-octane growth story: what was once dismissed by many as “just a bitcoin miner” is now being recast as a vertically integrated infrastructure play in the AI/cloud space. But the real story isn’t the rally we’ve already seen — it’s where IREN is potentially headed next.

In this post, we’ll trace the arc of IREN’s transformation, analyze what’s fueling the momentum today, and consider risks and inflection points ahead. My goal is not to issue a “buy or sell” verdict, but to give you a framework for thinking about why this rally may not be over — just entering a new phase.

From Bitcoin Miner to AI Infrastructure Play: The Backstory

To understand where IREN is going, we must first understand where it came from.

Origins as Iris Energy
IREN was formerly known as Iris Energy. Its roots lie in renewable-powered bitcoin mining, leveraging access to low-cost, often hydro-based electricity assets in places like British Columbia. TheMinerMag+2StockAnalysis+2
Over time, as the margins and volatility of crypto mining drew scrutiny, management evidently began to pivot toward using its infrastructure backbone for AI and cloud workloads.
Rebranding and repositioning
In November 2024, the company formally changed its name to IREN Limited, signaling a broader strategic focus than mining alone. Seeking Alpha+3StockAnalysis+3Seeking Alpha+3
That rebranding aligns with its evolving identity: owning data centers, power infrastructure, computing hardware, and land.
Vertical integration as the model
One of IREN’s competitive differentiators is its vertically integrated setup — it doesn’t purely host third-party compute; it owns the power agreements, land, and in many cases the compute infrastructure itself. StockAnalysis+3Nasdaq+3Seeking Alpha+3
That gives it potential advantages in cost control, flexibility, and margin leverage as it scales.
Execution over time
The pivot hasn’t been just in name. Over successive quarters, IREN has aggressively expanded its GPU fleet, inked cloud contracts, and secured additional power capacity to scale AI workloads. Seeking Alpha+5Investors+5Investors+5
In short: what some dismissed as speculative hype has been backed by hard steps.

When you step back, you see a transformation in motion: what once was a “bitcoin farm with green power” is becoming a compute infrastructure platform in its own right. And that shift is what underlies the notion that the rally is entering a new phase, not ending.

The New Phase: What’s Driving Momentum Now

If the old rally was driven by speculation and sheer upside potential, the coming phase needs to be grounded in fundamentals, execution, and scalability. Here are the key levers I see at work now — and their potential implications.

1. Accelerating GPU Fleet and Cloud Contracts

Probably the single biggest catalyst behind renewed investor enthusiasm is IREN’s aggressive push to scale its GPU fleet and sign multi-year cloud contracts.

Scale and ambition
IREN recently expanded its AI Cloud capacity from ~1,900 GPUs to 23,000 GPUs (in operation or on order). Seeking Alpha+2StockAnalysis+2
Of those, contracts for about 11,000 units (roughly half) are already secured, representing approximately $225 million in annual recurring revenue (ARR) commitments by end of 2025. Stocktwits+1
The company has guided toward surpassing $500 million of AI Cloud ARR by Q1 2026. Seeking Alpha+2StockAnalysis+2
Strong pricing discipline
Management claims that many contracts are structured to allow payback in ~2 years — a relatively aggressive but feasible target given scale, pricing, and cost base. Stocktwits+1
Also, as an Nvidia preferred partner, IREN may gain favorable access to GPU supply and pricing. StockAnalysis+3Investors+3Investors+3
Shift in revenue mix
For now, a large share of revenue still comes from bitcoin mining. But as the cloud segment grows, that balance may shift — with AI becoming a more stable, recurring, high-margin base. Seeking Alpha+4Investors+4Investors+4
If that shift happens well, it may help reduce volatility in earnings tied to crypto cycles.

In short: scale + contracts + pricing discipline = a more durable growth platform.

2. Power, Land, and Cost Advantage

A lot of the value in building compute infrastructure lies in the underlying physical resources: land, power, and cost access.

Subsidized, low-cost power
IREN holds ~2,910 MW of grid-connected power under contract, with electricity costs near $0.035/kWh — among the lowest in the AI/compute sector. Investors+3Seeking Alpha+3StockAnalysis+3
That power arsenal gives it both headroom to scale and the ability to undercut competitors reliant on more expensive energy.
Real estate and campus advantage
IREN owns or controls land suitable for data center deployment, giving flexibility and scale leverage. StockAnalysis+3Nasdaq+3TheMinerMag+3
Its campuses in British Columbia and data center buildouts in Texas (Horizon 1, Horizon 2) are designed for high GPU densities, potentially supporting 100,000+ GPUs over time. Seeking Alpha+3Stocktwits+3TheMinerMag+3

These advantages aren’t flashy, but they form the foundation that lets IREN scale efficiently — if it executes.

3. Financial Results and Margin Expansion

A rally can’t sustain forever on promises. The market now is looking closely at results, margins, and forward guidance.

2025 performance
In fiscal 2025, IREN reported ~$501 million in revenue (a 168% year-over-year increase) and adjusted EBITDA of ~$270 million. Its EBITDA margin was ~54%. Seeking Alpha+1
Those numbers reflect a business somewhere between hypergrowth and emerging scale.
Profitability trajectory
In earlier quarters, bitcoin mining still heavily influenced profits. But increasingly, the cloud business is contributing. Investors+2Investors+2
The ability of the GPU/cloud piece to maintain high margins will be critical to sustaining valuation multiples.
Funding and monetization strategy
To support this growth, IREN has proposed convertible note offerings (e.g. $875 million aggregate) to raise capital. StockAnalysis+1
The balance between dilution, leverage, and capital efficiency will be watched closely by investors.

4. Institutional and Insider Sentiment

Even the best models need backing. Some of the soft signals around IREN are getting stronger.

Institutional accumulation
Some funds are increasing positions — for example, Sippican Capital Advisors recently grew its IREN stake by ~28.6%. marketbeat.com
Meanwhile, IBD’s composite rating for the stock has climbed to ~96 (outpacing many peers) based on technical & momentum metrics. Investors
Accumulation / distribution metrics suggest institutional buying activity. Investors+1
Insider activity
It’s not all one-sided optimism: the CEO sold ~1,000,000 shares for $33.13 million in mid-2025, trimming his stake by ~6.7%. marketbeat.com
That sale raises eyebrows, but could reflect risk management or partial crystallization rather than lack of conviction.

What the “New Phase” Means — And What Could Go Wrong

Now that we’ve laid out the pillars driving the new leg of IREN’s rally, let’s explore what “new phase” really implies — and what risks to watch.

What the New Phase Could Look Like

Multiple rerating / valuation expansion
If the cloud piece starts contributing 30–50%+ of revenue with healthy margins, markets may revalue IREN toward more cloud/infra multiples instead of crypto multiples.
More stable earnings path
With less reliance on volatile bitcoin mining, earnings may smooth out. That could attract a different class of investors, reducing selloffs tied to crypto sentiment.
Accelerated scale in AI compute infrastructure
If IREN can deliver on scaling beyond 100,000 GPUs over time, it could become a serious player among niche AI cloud providers — especially for specialized workloads.
Strategic partnerships & ecosystem development
As IREN scales, partnerships with AI software firms, large customers, and data platforms could deepen — embedding it in the AI stack.

However — as with any speculative growth story — the path is fraught with execution risks, macro headwinds, and market sentiment swings.

Key Risks & Challenges

A. Execution risk at scale

Scaling from tens of thousands of GPUs to hundreds of thousands, with real customers and service-level expectations, is a major leap. Slips in deployment, cooling, connectivity, or reliability could undermine trust.

Also, converting contracted GPU revenue (which is often structural / multiyear) into sustained cash flow depends on utilization, customer retention, and pricing discipline.

B. Supply constraints & GPU cost

GPUs (especially top-tier models) remain in high demand, constrained supply, and cyclic pricing. Even with “preferred partner” status, IREN must manage lead times, cost volatility, and margin pressure if GPU prices surge. Seeking Alpha+3Investors+3Investors+3

C. Dilution, financing risk, and capital structure

To fund such growth, IREN is tapping capital markets (e.g. the proposed convertible note issuance). If that dilutes shares too heavily or adds debt burdens, investor returns might suffer. StockAnalysis+2Seeking Alpha+2

There’s also interest rate risk: in tighter monetary environments, capital becomes more expensive and growth equities get penalized.

D. Crypto exposure & correlation

Although the business is pivoting, IREN still carries exposure to bitcoin mining. Downturns in crypto prices or regulatory shocks in crypto could drag sentiment or hurt its base business. TheMinerMag+4Investors+4Investors+4

E. Market expectations & sentiment volatility

When a stock has rallied 5–10x, expectations become lofty. Any misstep (a soft earnings print, execution delay, GPU supply issues) may trigger strong negative reactivity.

Also, macro factors such as credit markets, interest rates, or regulatory changes in AI infrastructure could shift sentiment sharply.

F. Analyst and valuation skepticism

Not all analysts are fully on board. Some is caution embedded in targets: for instance, the average 12-month analyst target per StockAnalysis is $42.63, implying downside from current prices. StockAnalysis
That suggests some market watchers view today’s valuation as aggressive, expecting headwinds or reversion risk.

A Closer Look: Scenarios & Sensitivities

To better anchor the thinking, let’s run through a few illustrative scenarios and sensitivities that could define this “new phase.”

Base Case / Moderate Success

Cloud business reaches $400–600M ARR by FY 2026
EBITDA margins in the 40–50% range
Some dilution for capital, but manageable
Continued institutional support, modest multiple expansion

In this scenario, IREN could command a 2–3× multiple lift vs “bitcoin miner multiples,” potentially driving significant further upside.

Upside / Outperformance

Cloud ARR overshoots — e.g. $700M–$1B+
GPU scale accelerates beyond expectations
Strategic deals / partnerships amplify growth
Margins hold or improve, doubling down on infrastructure moat

Here, IREN might begin to trade in the same conversation as niche AI cloud or infrastructure plays, attracting broader institutional capital and valuation re-rating.

Downside / Pitfall Scenario

GPU deployments or customer rollouts are delayed
Cost overruns, cooling, reliability issues erode margins
Crypto headwinds drag sentiment or mining business weakens
Capital structure stress or dilution becomes excessive
Broader tech / AI retracement occurs

In that case, the stock could see a sharp pullback — not because the idea was bad, but because execution, timing, or external factors misalign.

Sensitivity to Key Variables

Usage / utilization rate — even with GPU capacity, revenue depends on how much of it is used by paying customers.
Pricing power — contracts need to be at healthy rates; discounting could erode margins.
Cost of power & cooling — rising electricity, grid constraints, or regulation could clamp margins.
Customer concentration / churn risk — if a few clients represent outsized share, their departure would hurt.
Dilution vs return tradeoff — capital raises should ideally drive growth that outpaces dilution.

A single misstep in any of these levers could temper or stall the new phase.

What to Watch in the Next 6–12 Months

To gauge whether IREN is successfully entering its next phase (or slipping), here are key milestones and metrics to monitor.

Quarterly cloud revenue & segment breakdown
Is cloud revenue growing sequentially? What share of total revenue does it represent?
Are margins in line with or improving on expectations?
GPU deployment and backlog fulfillment
How many GPUs are installed, operational, or under contract?
Are there delays or supply bottlenecks?
Utilization / customer adoption
What utilization rates are actual customers achieving?
Are contracts renewing or expanding?
Capital raises / balance sheet changes
How much dilution is occurring via convertible notes or equity issuance?
Does leverage stay in check?
Power / infrastructure stability
Any issues in power delivery, cooling, site licensing or environmental regulation?
Are there expansions to new campuses or improved density?
Insider and institutional flows
Are large funds continuing to accumulate or taking profits?
What do insider trades imply?
Comparative valuations & analyst revisions
Are analysts raising price targets, or downgrading?
How is IREN being priced relative to comparable AI/infrastructure peers?
Macro & sector trends
GPU price cycles, interest rate shifts, AI compute demand cycles, and regulatory developments all matter.
A downturn in the AI capital cycle could broadly pressure infrastructure valuations.

If most of these signals trend positive, the new phase is more likely to sustain.

Why Many Are Saying “It’s Just Getting Started”

Around mid-2025, several commentators and analysts began suggesting that what looked like a parabolic run might actually be the beginning of a multi-year re-rating.

A Seeking Alpha piece titled “IREN’s Rally Isn’t Over — It’s Entering a New Phase” argues exactly that: IREN is shedding the “bitcoin miner” label and re-anchoring itself as a vertically integrated AI cloud infrastructure utility. Seeking Alpha
Another article “IREN’s Stock Rally Is Just Getting Started” positions IREN’s forward valuation as still conservative relative to its cloud peers. Seeking Alpha
In market coverage, IREN was among the bitcoin miners that jumped after announcing multi-year cloud contracts tied to NVIDIA Blackwell GPU deployments — reflecting how its pivot is now market-catalytic. Investors+2Investors+2
Institutional interest (e.g. Sippican increasing exposure) and rising composite ratings support the notion that this is more than momentum — it’s structural interest. marketbeat.com+1

In other words: the narrative has shifted. The rally isn’t just about casino bets or hype — investors are beginning to price IREN as an AI infrastructure compounder.

Final Thoughts & Framing for Investors

So, is IREN’s rally over? My take: no — but the nature of the rally is changing.

What we’ve already seen is likely the “momentum phase” — driven by optimism, speculation, and the early execution of its pivot. The question now is whether IREN can deliver sustainable scale, margin durability, and capital discipline in its next leg.

If the company executes well — GPU deployments stay on schedule, cloud contracts accumulate, power and infrastructure scale remain cost-effective, and dilution stays manageable — then IREN could transition from a “crypto darling” into a viable, high-multiple AI infrastructure name.

But that’s a high bar. Execution missteps, capital strain, macro shocks, or valuation corrections in the AI/infra space could hit this story harder than many expect.

For investors, the opportunity lies in timing exposure into this evolving phase, watching the key signals closely, and being ready to adjust stance if execution falters.