Company Overview - IREN Limited is a leading AI Cloud Service Provider, specializing in large-scale GPU clusters for AI training and inference [3] - The company operates a vertically integrated platform supported by an extensive portfolio of grid-connected land and data centers located in renewable-rich regions across the U.S. and Canada [3] Financial Results Announcement - IREN will release its financial results for the three months ended December 31, 2025, on February 5, 2026 [1] - A conference call will be held at 5:00 p.m. Eastern Time on the same day, with a live webcast available [1] - Participants can register for the conference call and will receive dial-in information upon registration [1] Q&A Session - A Q&A session will follow the financial results presentation, allowing participants to ask questions via phone or during the live webcast [2] - Webcast participants can pre-submit questions upon registration or submit them during the event [2]

Core Insights - OpenAI, the creator of ChatGPT, is facing significant financial challenges, with estimates suggesting it may need to spend over $200 billion to achieve its growth objectives [1] Group 1: Investment Opportunities - Investing in companies that provide essential services to the AI sector, referred to as "pick-and-shovel" plays, may be a more prudent strategy than waiting for OpenAI to become investable [2] - Astera Labs, Iren, and Nokia are identified as key "pick-and-shovel" businesses that are well-positioned to benefit from the ongoing AI megatrend [3] Group 2: Company Profiles - Astera Labs specializes in products that enhance connectivity within AI data centers, addressing the significant computational needs of AI systems [5] - The company reported a remarkable 104% year-over-year revenue increase in Q3, reaching $230.6 million, with Q4 sales projected between $245 million and $253 million [7] - Iren, originally a Bitcoin mining business, is pivoting to expand its cloud computing capacity to meet the growing demand from hyperscalers for AI processing power [8]

Core Insights - Fidelity Wise Origin Bitcoin Fund (FBTC) offers direct exposure to Bitcoin's price movements, while Bitwise Crypto Industry Innovators ETF (BITQ) invests in a diversified portfolio of companies within the crypto economy [4][5] - Over the past year, BITQ returned 26.3%, whereas FBTC returned -5.0%, highlighting the performance disparity between direct and indirect crypto exposure [5] - FBTC has a lower expense ratio of 0.25% compared to BITQ's 0.85%, which may appeal to cost-sensitive investors [5] Investment Strategies - FBTC's portfolio is nearly entirely allocated to Bitcoin, providing unfiltered exposure to the cryptocurrency without the risks associated with operating companies [1] - BITQ targets the broader crypto economy by investing in 33 companies, primarily in financial services (72%) and technology (24%), with significant holdings in firms like Coinbase and Microstrategy [2][4] - The performance of BITQ is influenced by the success of its underlying companies, making it more susceptible to market sentiment and business performance than FBTC [6][7] Risk and Performance Metrics - FBTC's performance closely tracks Bitcoin's price, making it easier to understand the driving factors behind its returns [7] - BITQ's maximum drawdown was -51.22%, compared to FBTC's -32.64%, indicating higher volatility associated with the diversified equity approach [5] - The beta of these funds reflects their price volatility relative to the S&P 500, with FBTC being more directly correlated to Bitcoin's price movements [3][10] Investor Considerations - The choice between FBTC and BITQ depends on investor preferences for direct versus indirect exposure to cryptocurrency [8] - FBTC is suited for those who want a direct link to Bitcoin's price, while BITQ appeals to investors looking for exposure through publicly traded companies [8] - Understanding the implications of market forces and management execution is crucial for investors considering BITQ [8]

Group 1 - IREN Limited is a new player in the cloud infrastructure sector for AI, offering a unique advantage due to its existing capacity for data deployment [1] - The company aims to identify profitable and undervalued investment opportunities primarily in the U.S. market, focusing on building a high-yield, balanced portfolio [1] Group 2 - The analysis combines macro-economic insights with real-world trading experience to provide actionable investment ideas [1]

Group 1 - Bitcoin-related stocks experienced a widespread decline before the US stock market opened on Tuesday, with Bitcoin dropping below the $91,000 mark, reaching a low of $90,679 [1] - Strategy (MSTR.US) fell over 5%, while Coinbase (COIN.US) and Circle (CRCL.US) both dropped more than 4%, and Mara Holdings (MARA.US) decreased by over 4.7%, with IREN Ltd (IREN.US) declining more than 6% [1]

Group 1: Market Reactions - U.S. tech index futures are under pressure due to concerns over President Trump's failed attempt to acquire Greenland and potential mutual tariffs with European nations, leading to a 2% decline in the Invesco QQQ Trust Series in pre-market trading [1] - Bitcoin has fallen to $90,000, down 8% from its recent high, negatively impacting crypto-related equities such as Strategy (MSTR), Galaxy Digital (GLXY), and IREN (IREN), which are down 6% to $164, 8% to $32, and 8% to $53 respectively [3] - The DXY index, which measures dollar strength against major currencies, has decreased by 0.5% to 98.5 [5] Group 2: Commodity Performance - Gold is trading above $4,700 per ounce, reflecting a 9% increase year to date, while silver has surpassed $95 per ounce, showing a 32% rise in the same period [4] Group 3: Bond Market Dynamics - U.S. Treasury yields have risen, and Japanese long-dated bonds are under pressure, with yields on Japan's 30-year government bonds surging close to 4%, indicating stress in the global bond market [4]

Industry Overview - Artificial intelligence stocks have been among the best investments over the past year, outperforming the S&P 500 in 2025, with potential for continued success into 2026 and beyond [1] Company: IREN - IREN (NASDAQ:IREN) is an AI infrastructure company with a significant 5-year, $9.7 billion deal with Microsoft (NASDAQ:MSFT) for 200 megawatts, highlighting the demand for data centers and energy to support AI workloads [2] - The company has approximately three gigawatts in its pipeline, with its 1.4 gigawatt Sweetwater 1 site expected to be operational by April, ahead of competitors [3] - Although IREN started as a crypto miner, the Microsoft deal and potential for similar agreements are expected to shift its business trajectory, with the stock price increasing over 300% in the past year [4] Company: Rezolve AI - Rezolve AI (NASDAQ:RZLV) has a market cap of $1.5 billion and has seen a rally of over 90% in the past year, despite a 40% decline from its all-time highs [5] - The company exited 2025 with approximately $209 million in annual recurring revenue and anticipates reaching at least $500 million by the end of 2026, with projected earnings of $350 million in 2026 compared to $40 million in 2025 [6][7] Company: Aeluma - Aeluma (NASDAQ:ALMU) is a semiconductor company that has nearly tripled in value over the past year, attracting significant investment despite only generating $1.4 million in Q1 FY26 [8] - The company has secured new partnerships and extended contracts, including with NASA, and expects to generate $4 million to $6 million in revenue in fiscal 2026 as it expands into commercial markets [9] - Aeluma has no long-term debt and holds $38 million in cash, positioning it for potential significant returns if commercialization efforts succeed [10]

Core Viewpoint - Iren Ltd. is positioned as a leading player in the AI sector, with significant growth potential driven by a major deal with Microsoft and a robust development pipeline [1][4]. Group 1: Company Developments - Iren Ltd. has received a double upgrade from H.C. Wainwright analyst Mike Colonnese, moving from Sell to Buy with a price target of $80.00, indicating strong confidence in the company's future [1]. - The company has secured a $9.7 billion, five-year AI cloud deal with Microsoft, expected to generate approximately $1.94 billion in annual recurring revenue (ARR) once 200 MW of capacity is deployed [4]. - Iren has over 2 GW of incremental capacity planned to be energized by 2027, which is anticipated to facilitate growth in AI colocation services [5]. Group 2: Market Trends and Analyst Insights - Analysts predict that the AI infrastructure trade will remain a significant investment theme through 2026, driven by hyperscaler capital expenditure budgets and increasing demand for large-scale power [2]. - Colonnese highlights that Iren offers the most leveraged exposure among its coverage universe due to its substantial AI contract with a reputable counterparty, which is not fully reflected in the current stock price [3]. - The stock has experienced a correction of approximately 35% from its all-time highs in early November 2025, presenting a favorable entry point for investors [6].

Group 1: Company Performance - IREN Ltd. (NASDAQ:IREN) experienced a significant increase of 11.43 percent, closing at $57.82, following two days of losses, driven by higher spending from a major semiconductor manufacturer amid strong AI sector demand [1] - IREN Ltd. received bullish coverage from investment firms HC Wainwright and Bernstein, with HC Wainwright setting a price target of $80, indicating a 38 percent upside potential, while Bernstein reduced its target to $75, still representing a 30 percent upside potential [5] Group 2: Industry Developments - Taiwan Semiconductor Manufacturing Company (TSMC) announced a budget increase of 33 to 37 percent for this year, ranging from $52 billion to $56 billion, compared to $38 billion to $42 billion last year, due to strong semiconductor demand [2] - TSMC reported a 35 percent increase in net income to NT$505.7 billion from NT$374.68 billion year-on-year, and net sales rose by 20.5 percent to NT$1.046 trillion from NT$868.46 billion [4] - Optimism in the market is bolstered by TSMC's strong earnings, positively impacting companies like IREN Ltd. and SuperMicro Computer Inc., which rely on Nvidia Corp.'s GPUs manufactured by TSMC [3]

Core Insights - The "AI cloud" trade is returning as funds flow back into pure play compute supply-side stocks after a period of volatility since 2026, with CoreWeave up over 40%, Nebius up nearly 30%, and Iren up over 53% [1][5]. Group 1: Market Dynamics - The rebound is driven by improved earnings expectations and upward price movements, with strong signals from the chip sector providing external validation for the "AI cloud" [4]. - Recent performance from TSMC, which exceeded expectations and raised its 2026 capital expenditure forecast, reinforces the view that AI demand is still expanding, alleviating risks associated with the AI cloud service model [4][8]. Group 2: Company Performance - Iren, a vertically integrated digital infrastructure company, is expected to see sales growth of approximately 120% this year and an additional 151% next year, benefiting from rising demand for compute and power from AI and data-intensive workloads [5][7]. - Nebius, positioned as an AI-focused infrastructure and cloud service provider, is projected to experience a staggering 376% sales growth next year due to upward revisions in earnings expectations [7]. - CoreWeave has made significant progress by delivering over 16,000 GPUs by the end of December, recovering from revenue impacts caused by delays in the previous quarter [7][8]. Group 3: Industry Validation - TSMC's record manufacturing yield and capacity expansion provide a solid foundation for new cloud service providers like CoreWeave and Nebius to fulfill their multi-billion dollar backlog orders [8]. - TSMC's gross margin of 62.3% indicates not only industry growth but also high profitability, which helps to alleviate concerns regarding an "AI bubble" [8].