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Valuing IREN (NasdaqGS:IREN) After Major AI Cloud Expansion and Growing Investor Interest

Simply Wall St · 10/04/2025 19:51

IREN (NasdaqGS:IREN) has just expanded its AI Cloud capacity by purchasing more than 12,000 new GPUs, raising its fleet to 23,000 units. This move supports a goal of reaching $500 million in cloud revenue by early 2026.

See our latest analysis for IREN.

IREN’s announcement comes as optimism builds around growth stocks, particularly those leaning into next-generation AI infrastructure. After a surge of industry headlines and rising demand for advanced cloud services, IREN’s 1-year total shareholder return of 4.8% and a 12.6% return over three years point to gradual long-term momentum. The share price has inched up recently, and these bold expansion moves appear to be reigniting interest as the company pivots beyond its Bitcoin mining roots toward higher-value cloud opportunities.

If the shift into AI and cloud is catching your attention, it’s worth taking the next step and exploring fast growing stocks with high insider ownership.

Yet with IREN’s valuation rising alongside ambitious guidance, investors now face the pivotal question: is the stock still trading at an attractive entry point, or has the market already factored in its AI Cloud growth story?

Most Popular Narrative: 30.4% Undervalued

The narrative from BlackGoat puts IREN’s fair value at a sizable premium to its last close, suggesting there is significant room for further upside. The stage is set by strong capital deployment and a bold shift into AI infrastructure, but latent risks and major catalysts are driving the conversation around the stock’s next move.

We are witnessing a classic market re-rating unfolding in four distinct stages. Phase 1: Achieving Book Value ($5 → $15) This initial move reflected the market’s overdue recognition of IREN’s tangible assets: its power infrastructure, strategic land holdings, existing data centre shells, and high-efficiency Bitcoin mining business. Valuation was simply catching up to the physical reality of what the company already owned.

Read the complete narrative.

Curious what delivers this bold valuation call? There is one financial lever at the core of BlackGoat’s case, and it is not just the expansion into AI. The full narrative reveals which growth rates and profit numbers are required to justify the target price, along with a market backdrop that could flip the investment story on its head. Don’t miss the key projection that underpins everything.

Result: Fair Value of $72.52 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks remain. Setbacks in securing a major hyperscaler contract or unexpected dilution could quickly shift sentiment and temper IREN’s bullish narrative.

Find out about the key risks to this IREN narrative.

Another View: What Does the DCF Say?

While some investors focus on IREN’s fair value premium, our DCF model presents a less optimistic perspective. Based on current projections, IREN’s share price of $50.46 is above our fair value estimate of $43.16, indicating it may be overvalued if growth does not accelerate. Which approach will prove right?

Look into how the SWS DCF model arrives at its fair value.

IREN Discounted Cash Flow as at Oct 2025
IREN Discounted Cash Flow as at Oct 2025

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out IREN for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own IREN Narrative

If this outlook does not fit your view, or you prefer to dig into the numbers on your own, it’s quick and easy to craft a personal narrative in just a few minutes. Do it your way.

A great starting point for your IREN research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.