IREN Ltd. (IREN) – ARCTOS FX

Feb 22, 2026 1:30 PM

IREN Ltd (formerly Iris Energy, a pure-play Bitcoin miner) is a vertically integrated technology company that operates high-performance data centers powered by 100% renewable energy. The company is currently pivoting its core business to focus on AI cloud infrastructure and high-performance computing (HPC) services.

What does IREN do?

AI Cloud Services: IREN provides Infrastructure-as-a-Service (IaaS) for AI workloads, utilizing clusters of high-end GPUs like NVIDIA H100s, H200s, and Blackwell chips.
Bitcoin Mining: The company remains one of the world’s largest Bitcoin producers, with an installed capacity of 50 EH/s. While historically its main revenue driver, IREN is actively repurposing its power capacity for higher-margin AI services.
Data Center Infrastructure: IREN owns and operates the physical hardware, electrical infrastructure, and high-density, liquid-cooled data centers required for power-dense computing.

What Value does IREN offer?

IREN’s value lies primarily in its unique “power pipeline” and industrial assets that directly solve the critical shortage of AI infrastructure. An example is Microsoft’s (MSFT) $9.7 billion deal with IREN signed in late 2025. Microsoft chose IREN because it provided immediate access to scarce GPU capacity and sustainable energy without Microsoft having to build its own data centers from scratch, significantly accelerating their time-to-market for new AI services.

Secured, Large-Scale Power: Power is the primary bottleneck for AI. IREN controls approximately 3 gigawatts (GW) of secured, grid-connected power capacity—a massive resource that allows partners to scale rapidly without waiting years for new utility interconnections.
Vertical Integration: Unlike many competitors who lease space, IREN fully owns its land, data centers, and electrical infrastructure. This “total control” reduces counterparty risk and allows for faster deployment of GPU clusters (months vs. years).
Industry-Leading Low Costs: IREN’s vertical model and use of “stranded” energy allow it to achieve some of the lowest power costs in the sector (approx. $0.033 per kWh). This allows partners like Microsoft to avoid heavy capital expenditures while maintaining high operational margins.
100% Renewable Energy: All IREN operations are powered by renewable sources (hydro and wind). This is a critical requirement for global tech giants like Microsoft to meet their ESG (Environmental, Social, and Governance) and carbon-negative goals.
NVIDIA Preferred Partner Status: As a preferred partner, IREN has priority access to highly constrained hardware, such as NVIDIA Blackwell GB300 GPUs. This ensures that clients have access to the latest computing power even during supply shortages.
Specialized AI Infrastructure: IREN’s data centers (such as the Horizon series) are purpose-built for high-density AI training and inference, featuring advanced liquid-cooling systems capable of supporting 70kW+ per rack.

What is the Markets’ Take and Why?

The market remains optimistic about IREN as a high-conviction “transformation” trade, shifting from a legacy Bitcoin miner to a major AI cloud infrastructure provider. While the long-term outlook is strongly bullish due to a massive $9.7 billion Microsoft contract, current sentiment is tempered by short-term “execution risk” as the company manages heavy capital expenditures during this transition.

Bullish

Microsoft Validation: The $9.7 billion deal is seen as a “defining milestone” that validates IREN’s vertically integrated model and its ability to serve hyperscale customers.
Infrastructure Scarcity: Investors value IREN’s 4.5 GW of secured power capacity, which is increasingly rare and essential for the “AI arms race”.
Massive Revenue Targets: Management is aiming for $3.4 billion in annualized recurring revenue (ARR) by the end of 2026, with $2.3 billion already under contract

Bearish

Execution Timing: There is a “monetization gap” where current earnings are depressed by construction and GPU commissioning costs before full AI revenues kick in.
Bitcoin Volatility: Despite the AI focus, the stock remains sensitive to Bitcoin price fluctuations, which can impact short-term cash flow needed for its massive build-outs.
Concentration Risk: The heavy reliance on a few major contracts, particularly Microsoft, makes the stock vulnerable to any potential delays or renegotiations.

Upcoming Catalyst(s)

2026 looms as a pivotal year for IREN as the company transitions from Bitcoin mining to a high-performance computing (HPC) and AI cloud infrastructure leader. As such, here are the key events and milestones that investors will be focusing on:

Operational & Infrastructure

Sweetwater 1 Energization (April 2026): would prove IREN’s ability to bring massive-scale power online.
Phased Microsoft Deployments: Under the $9.7 billion Microsoft contract, GPU clusters will be deployed in four phases (Horizons 1–4) through 2026 at the Childress campus. Each successful phase commission is a direct revenue catalyst.
GPU Fleet Expansion: IREN aims to scale its GPU fleet from approximately 23,000 units to 140,000 GPUs by the end of 2026 which is expected to support an annualized run-rate revenue (ARR) of $3.4 billion.
British Columbia Site Transition: Converting sites in Prince George, Mackenzie, and Canal Flats from ASIC mining to GPU operations by the end of 2026 is expected to add $1 billion in incremental ARR.

Financial

Q3 Fiscal 2026 Earnings (May 13, 2026): IREN’s next quarterly earnings (May 13, 2026) should show a rebound in revenue quality following a miss in February 2026 that was impacted by a decline in Bitcoin mining revenues.
MSCI USA Index Inclusion (February 27, 2026): This typically triggers forced buying from passive index funds and increased institutional visibility.
New Hyperscale Contracts: IREN may announce additional AI cloud contracts in 2026, leveraging the 4.5 GW of secured power capacity that remains 90% unutilized even after the Microsoft deal.

Key Risks

Capital Expenditure & Dilution: Scaling to 140,000 GPUs requires roughly $5.8 billion in investments. Investors will closely watch for potential shareholder dilution from new equity raises or convertible note issuances needed to fund this growth.
Bitcoin Price Correlation: While pivoting to AI, IREN’s legacy mining operations still link its stock price to Bitcoin volatility. A significant drop in Bitcoin prices could strain the cash flow needed for its AI expansion.

( NOT FINANCIAL ADVICE )

Selling OTM PUTs with strikes around $20 / $25 might be the way to play this if one buys the bullish thesis but wants a bit of safety as IREN “proves” its value.