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].

Core Insights - The market has seen aggressive gains in AI-related stocks like Iren Limited, Nebius Group, and CoreWeave, with triple-digit increases in a short period due to enthusiasm for AI infrastructure and data centers [1] - A recent shift in market sentiment has led to stabilization and upward movement in share prices, with improving earnings estimates and renewed investor interest in niche AI infrastructure [2] Iren Limited (IREN) - Iren Limited operates in high-performance data centers and bitcoin mining, supported by renewable energy, positioning it well for rising demand in AI and data-intensive workloads [3] - The company's sales are projected to increase by approximately 120% this year and an additional 151% next year, indicating a strong growth outlook [4] - IREN's stock has recently broken out of a Stage One base, suggesting the beginning of a new uptrend, supported by accelerating fundamentals and improving technical structure [5] Nebius Group N.V. (NBIS) - Nebius Group focuses on AI infrastructure and cloud services, providing high-performance compute capacity for AI workloads, which positions it within the core layers of the AI infrastructure stack [8] - The stock has risen nearly 5% recently, reflecting improving investor sentiment, with sales expected to surge by 376% next year [9] - Nebius has also broken out from a Stage One base, indicating potential for a new uptrend, with both technical momentum and earnings expectations on the rise [10] CoreWeave Inc. (CRWV) - CoreWeave specializes in high-performance GPU compute for AI and advanced data workloads, establishing itself as a key player in AI-focused cloud capacity [12] - The stock has increased by over 6%, signaling a constructive rebound, with projected sales growth of 126% next year [13] - CoreWeave has broken out from a Stage One base, suggesting a transition to a new uptrend, supported by accelerating revenue growth and improving analyst sentiment [14] Market Outlook - All three companies are showing patterns of improving earnings outlooks, renewed investor interest, and technical breakouts, indicating a potential return of risk appetite in the AI infrastructure sector [16]

Core Insights - IREN Limited's vertically integrated AI cloud platform is designed to achieve higher margins compared to traditional colocation models by controlling power procurement, substation development, data center construction, and GPU deployment, which reduces costs and counterparty risks [1][10] Financial Performance - In Q1 of fiscal 2026, IREN reported $92 million in adjusted EBITDA on $240 million in revenues, indicating improving profitability as AI cloud services contribute more significantly to revenue [5] - The Zacks Consensus Estimate predicts over 100% revenue growth for IREN in both fiscal 2026 and 2027 [5] Competitive Landscape - TeraWulf (WULF) is a close competitor, focusing on HPC leasing with 520 MW of long-term, credit-backed capacity, but IREN maintains more balance-sheet flexibility and potential for growth as AI demand evolves [6] - CleanSpark (CLSK) is seen as a long-term challenger with a strong power and land base, but its AI strategy is still developing, allowing IREN to lead in the short term [7] Operational Advantages - Vertical integration enables faster commissioning and tighter operational controls, reducing idle capacity and accelerating revenue recognition [3] - IREN controls approximately 3 GW of secured grid-connected power, with only 16% utilized for its planned 140,000-GPU expansion, supporting lower costs and long-term cash flow visibility [4][10] Market Performance - IREN's shares have increased by 189.3% over the past six months, significantly outperforming the broader Zacks Finance sector's return of 7.2% and the Zacks Financial Miscellaneous Services industry's decline of 18.1% [8]

Core Viewpoint - IREN Limited is positioned as a leader in the Bitcoin infrastructure sector, focusing on low-cost, renewable-powered Bitcoin mining and expanding into AI computing, while Hut 8 Corp. offers a diversified platform that includes mining, hosting, and digital infrastructure services [2][3]. Company Overview - IREN and Hut 8 provide leveraged exposure to Bitcoin through physical infrastructure, relying on power access, efficient data centers, and scalable computing capacity rather than merely holding Bitcoin [3]. - IREN has secured 3 gigawatts of power capacity in renewable-rich regions, enhancing cost control and scalability for Bitcoin mining [4]. - Hut 8's infrastructure model faces execution and valuation risks, with earnings closely tied to Bitcoin price fluctuations and power costs [9]. Growth Opportunities - IREN is shifting its focus towards AI computing, with plans to expand its GPU fleet from 23,000 to 140,000 units by the end of 2026, targeting a $3.4 billion annual recurring revenue (ARR) opportunity [5]. - Hut 8's substantial 8.65 GW development pipeline has yet to be monetized, limiting its market acceptance until implementation milestones are achieved [10][11]. Financial Performance - IREN's fiscal 2026 revenue is estimated to increase by 119.6%, with earnings projected at 64 cents per share, reflecting a significant turnaround from previous earnings of just 4 cents per share [7]. - Hut 8's consensus estimate for a 2026 loss is pegged at 90 cents per share, indicating a deterioration in profitability concerns [12]. Stock Performance and Valuation - IREN has outperformed Hut 8, with a stock increase of 335.5% compared to Hut 8's 113.5% gain over the past year, attributed to IREN's decisive execution in AI infrastructure [15]. - IREN's price/sales ratio stands at 7.3X, lower than Hut 8's 13.43X, indicating a more favorable valuation supported by strong revenue visibility and disciplined execution [17]. Conclusion - IREN is viewed as the more attractive investment due to its vertically integrated platform, visible AI-driven revenue pipeline, and stronger balance sheet, while Hut 8 faces challenges with uneven execution and widening losses [17][18].

Core Viewpoint - IREN's stock has surged over 20% this week due to analyst upgrades and its transition from cryptocurrency mining to AI cloud services, supported by a significant contract with Microsoft worth $9.7 billion [1][3][9]. Analyst Upgrades and Market Sentiment - Bernstein has identified IREN as a top AI stock for 2026, while H.C. Wainwright upgraded the stock to a buy, citing its successful pivot to an AI cloud provider as a key factor for the stock's price increase [2][9]. - The stock has gained popularity among retail traders, particularly on platforms like X and Reddit, contributing to its recent performance [4]. Business Transition and Revenue - IREN is transitioning from being a Bitcoin miner to an AI cloud provider, with a notable contract from Microsoft that has significantly impacted its stock price, leading to an increase of nearly 400% over the past year [3][4]. - Despite the positive outlook, IREN's current revenue from AI cloud services is minimal, with only $7.3 million reported last quarter, highlighting a disparity between market valuation and actual earnings [4][6]. Valuation Concerns - IREN's market capitalization has reached $16 billion, which is considered a substantial premium given its current AI cloud revenue of less than $10 million per quarter [6][7]. - The long-term nature of the Microsoft contract and the associated build-out costs suggest that it may take years for IREN to achieve profitability in the AI cloud segment, raising concerns about the stock's current valuation [7].