Business
IREN Shifts Focus from Bitcoin Mining to AI Data Centers

Iris Energy, now known as IREN Ltd. (NASDAQ: IREN), is making a significant shift in its business strategy, moving away from its roots in Bitcoin mining toward the burgeoning market of data centers designed for artificial intelligence (AI) and high-performance computing (HPC). Founded in 2018 and based in Sydney, the company has built its reputation on environmentally sustainable Bitcoin mining. However, with a focus on the future, IREN is now investing heavily in AI infrastructure, a decision that has captured the attention of Wall Street.
The company’s new strategy is underpinned by a vertically integrated model. IREN owns its operational sites, manages its renewable energy contracts, and constructs its own data centers. This approach has already yielded impressive financial results, with FY25 revenue reaching $501 million, reflecting a remarkable year-on-year increase of 168 percent. The net income for the same period was $86.9 million.
In a decisive move away from solely expanding its Bitcoin mining operations, IREN announced in September that it has expanded its AI cloud capacity to include 23,000 Nvidia chips, projecting an annualized revenue run-rate of $500 million by the end of this year. A newly constructed 75 megawatt liquid-cooled facility in Sweetwater, Texas, designed specifically for high-demand AI workloads, highlights the seriousness of this pivot. This strategy addresses Bitcoin’s “halving problem,” which reduces mining rewards every four years, while leveraging the expected global growth in AI. Analysts anticipate the demand for data centers could reach 1,000 gigawatts (GW) of new capacity by 2030.
The financial implications are substantial. Hosting AI workloads can yield revenue 2 to 3 times higher per megawatt than traditional mining. IREN’s focus on renewable energy also positions it favorably among clients facing increasing pressure from environmental, social, and governance (ESG) regulations, such as the European Union’s Corporate Sustainability Reporting Directive.
Wall Street’s Mixed Reception
Investor sentiment on Wall Street is varied but generally optimistic regarding IREN’s new direction. Bernstein analyst Gautam Chhugani recently raised his price target for IREN stock to $75. Meanwhile, Darren Aftahi from Roth Capital/MKM has set an even more ambitious target of $82, suggesting that IREN’s GPU expansion could generate up to $2.7 billion in revenue and $1.2 billion in EBITDA by FY28. Other firms, including Arete Research and Compass Point, have similarly issued positive forecasts, with new “Buy” ratings indicating increased confidence in IREN’s AI-driven pivot.
Despite the generally positive outlook, not all analysts share this enthusiasm. Reggie Smith of J.P. Morgan downgraded IREN to “underweight,” assigning a price target of $24. He cautioned that the current stock price already factors in a substantial colocation deal exceeding $10 billion. Critics also point out that IREN’s AI cloud revenue was only $2.7 million in Q2 FY25, a modest figure compared to its mining revenue. Achieving the ambitious target of $500 million will require precise execution and scaling.
This evolving landscape has led to a notable shift in IREN’s valuation, moving from traditional Bitcoin mining metrics to a focus on the growth and profitability of its AI infrastructure. For investors, this translates to higher potential returns, albeit with increased volatility.
Future Prospects and Challenges
IREN will participate in the North American Blockchain Summit (NABS) on October 9-10, 2025, at the George W. Bush Presidential Center in Dallas, Texas. The company aims to leverage this platform alongside fellow sponsor Riot to advocate for favorable regulations and showcase its commitment to renewable energy.
Despite the promising outlook, several risks remain. Supply chain issues related to GPU shortages, stringent energy regulations, and competition from established players like Equinix could hinder IREN’s growth trajectory. The challenges highlighted during the 2022 crypto winter serve as a reminder of the sector’s volatility.
Nevertheless, IREN’s low-cost structure, robust renewable energy pipeline, and clear pivot towards AI provide a foundation for resilience. The company is targeting $500 million in annualized EBITDA by 2026, leveraging its mining revenues as a springboard into higher-margin hosting solutions.
In conclusion, Wall Street’s response to IREN’s strategic pivot has been largely positive. With shares experiencing significant growth and analysts setting bold targets, the company’s transition from Bitcoin mining to AI data centers appears promising. The ultimate test will be how effectively IREN can execute this strategy, with the potential for the stock price to reach even the highest targets if successful. Currently, the stock is trading close to $50, a remarkable increase from its $17 price in July.
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