A $1.6 Billion Reason to Buy IREN Stock Now

There's a class of very speculative Bitcoin (BTCUSD) mining companies that have converted their expertise in mining Bitcoin into AI computing operations. These companies have been making a killing, with IREN (IREN) being one of the most successful.

IREN is now a high-performance computing (or HPC) company. It buys the hardware and has its own data centers, from which it sells compute. Computing capacity is scarce, and AI companies are buying from essentially whoever they can get compute from. Thus, the business model has been working surprisingly well.

IREN's Multi-Billion-Dollar Deals on the Rise

Last year in November, IREN announced a massive $9.7 billion deal with Microsoft (MSFT). IREN will give Microsoft access to Nvidia (NVDA) GB300 GPUs for over five years. It then entered into an agreement with Dell (DELL) to buy the hardware for $5.8 billion. The GPUs would be deployed in phases through 2026 at IREN's 750MW Childress, Texas, campus across four liquid-cooled data centers called Horizon 1 through 4.

IREN ended up missing revenue estimates in Q2 FY2026, but this was mostly due to Bitcoin-related revenue declining as the company is focusing almost entirely on AI now. It has a cash position of $2.6 billion in Q3 FY2026 and reported $9.2 billion secured from funding sources the quarter before. It used a portion of this cash to buy cloud infrastructure software provider Mirantis in a deal worth $625 million.

The deals kept on rising, with IREN announcing a $3.4 billion AI cloud contract with Nvidia.

The New Deal with Dell

IREN signed a $1.6 billion purchase agreement with Dell for air-cooled Blackwell systems to be deployed at its data center in Childress. Once all of this comes online, the company says its annualized recurring revenue will climb from $3.7 billion to $4.4 billion.

One thing that's interesting here is that IREN is not building data centers from the ground up. It is often retrofitting buildings and using leftover equipment and employees from its Bitcoin mining operations to drive down costs. This makes it arguably a better bet than many other "neocloud" companies that don't have existing facilities or a workforce familiar with GPUs.

‘Profits’ Aren't Keeping Up

IREN believes it can convert secured power into customer-ready compute faster than its rivals, and that demand stays hungry long enough for the run-rate to catch up to the contracts.

All of this only works if the stock market keeps rewarding the stock as data center revenue continues to increase. If you look at the business holistically, things look more grim. Trailing 12-month revenue has flatlined at ~$600-700 million and is going down. Quarterly losses have shot up significantly due to the build-out, and it gets even worse if you look at free cash flow.

Free cash flow was -$1.38 billion in calendar Q1 2026 alone.

IREN is going to need continuous cash infusions from other AI companies if it is to keep up.

Should You Buy IREN Stock Now?

IREN just closed a $3.6 billion GPU financing, and the stock continues to go up. As long as Wall Street is happy with the growth and the financials, you're not going to be disappointed. The broader stock market rally will keep IREN stock high.

That said, I do see IREN continuing down CoreWeave's (CRWV) path of racking up tens of billions in debt to deal with precipitous losses, in the hopes that compute demand will rise so fast that all of this will pay off by the time they are done.

It's one of the riskiest bets in the market over the long run since no one knows whether or not compute demand can keep growing by triple digits many years in a row. Most companies have already integrated AI, and those who have not done so are probably having their employees use AI in some capacity.

In the interim, I will tag IREN stock as a “Buy.” The broader rally can take this stock higher.