IREN shares have climbed 414% over the past two years as the former bitcoin miner rebuilds itself into an AI cloud provider, but the stock still trades 40% below its 52-week high. A $9.7 billion Microsoft contract and a planned $25 billion to $30 billion in 2027 capital expenditures now anchor the company's next phase.
IREN shares are up 414% over the past two years as the company shifts from bitcoin mining toward AI cloud services. Yet the stock remains 40% below its 52-week high as investors weigh the massive spending and debt load around the broader AI build-out.
IREN's pivot from bitcoin mining to AI cloud services
Founded in 2018 as Iris Energy, IREN began as a renewable-powered bitcoin miner before exploring an AI pivot in 2024. The company now owns about 5 gigawatts of grid-connected power capacity across North America, Europe, and Asia, with more in development. It also has over 150,000 GPUs installed or on order, putting the company in position to meet hyperscalers' compute and power needs.
A $9.7 billion Microsoft contract anchors the buildout
On Nov. 3, 2025, IREN announced a $9.7 billion, five-year cloud contract with Microsoft, under which it will deliver GPU clusters from its Childress, Texas data centers. The deal includes a 20% prepayment and is projected to contribute $1.94 billion in annualized revenue run rate at an 85% EBITDA margin once fully commissioned. IREN also closed its fiscal 2026 year, which ended June 30, 2026, with $4 billion of ARR contracted for its current capacity, including new multi-year contracts with Cohere, Prometheus, Perplexity, Figure AI, Fal AI, and Higgsfield AI.
Pricing power rises as spending guidance grows
According to IREN, structural compute shortages have pushed three-year contract pricing up roughly 125% and five-year rates up 70%. Management estimates that under current pricing, compute hardware investments will pay back in approximately two years. At the same time, IREN is guiding to $25 billion to $30 billion in capital expenditures for fiscal year 2027, covering GPUs, construction, and long-lead infrastructure. That spending plan suits investors who believe GPU prices will hold firm and that the company can convert its assets into profit.
Source: The Motley Fool
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