Should you sell your IREN stock?

Roth Capital Markets analyst Darren Aftahi raised his price target on IREN Limited (IREN Limited Stock Quote, Chart, News, Analysts, Financials NASDAQ:IREN) to US$94 from US$82 on Nov. 3, maintaining a “Buy” rating after the company unveiled a landmark AI Cloud agreement with Microsoft, an announcement he said gives IREN’s AI Cloud strategy the “brand validation” the market was waiting for.

Aftahi said the deal marks a pivotal shift for IREN, elevating the company from a renewable-powered Bitcoin miner with AI ambitions to a credible hyperscale AI Cloud (AIC) provider.

“We believe this is an initial first step for Hyperscaler AIC/DC deals, with our expectation there is probably more legs to it,” he said, calling it a catalyst that should unlock further enterprise-grade demand.

Based in Australia, IREN operates institutional-grade, 100% renewable-powered data centres across North America, generating revenue through Bitcoin mining and AI Cloud hosting. The company runs more than 300 MW of energized capacity with more than 3 GW of long-term development potential.

The new 5-year, 200 MW AI Cloud services agreement with Microsoft carries a total contract value of ~US$9.7-billion, including a 20% revenue prepayment (~US$1.94-billion) to be credited back in years 3–5. The project will see IREN build four Horizon Tier-3 HPC data centres at its Childress, Texas campus, rolling out through 2026. Capex is now expected at ~US$15-million/MW, roughly double prior estimates, reflecting accelerated delivery timelines, server fit-outs and higher build costs. Dell will supply the GPU/server racks under a separate ~US$5.8-billion arrangement.

Aftahi said the agreement gives IREN line-of-sight to roughly US$2.5-billion in annual AIC recurring revenue by the end of 2026. While he noted EBITDA margins for AIC are “a misnomer” given GPU depreciation, he estimates IREN’s AIC EBIT margins in the low-30% range, above typical 20–30% long-term Neocloud targets.

He added that IREN appears positioned to replicate the model across its North American footprint. The remaining ~450 MW at Childress and ~160 MW in British Columbia could be transitioned to liquid-cooled GPU racks or converted to long-term HPC colocation leases after initial AIC contracts mature.

Aftahi expects more AIC deal announcements, and said Microsoft’s involvement should materially reduce IREN’s cost of capital as it scales.

The analyst updated his model to reflect a broader AIC business mix and more staggered revenue ramp, shifting some contribution from FY26 into FY27.

Aftahi said IREN should post US$492.6-million (was US$611.8-million) in Adjusted EBITDA on US$922.3-million (ws US$1,086.8-million) in revenue in fiscal 2026, improving to US$1.8043-billion (wasUS$1.816.0-billion) on US$2.3215-billion (wasUS$2.4617-billion) in fiscal 2027.

He also adjusted capex requirements. To reach ~340 MW of contracted IT load and ~176,000 GPUs by FY27, he estimates IREN will need ~US$8.8-billion in incremental cash/financing, partly offset by its current US$1.8-billion cash balance (convert-adjusted) and the US$1.94-billion Microsoft prepayment. Aftahi now applies a ~15× EV/EBIT multiple to the AIC segment within his SOTP valuation to arrive at the new US$94 target.

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