Why IREN Stock Soared More Than 20% This Week

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].