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Will IREN's (IREN) US$9.7 Billion Microsoft AI Deal and Capital Raise Change Its Narrative?

Simply Wall St · 2d ago
  • In recent weeks, IREN Limited completed a US$1.63 billion registered direct equity offering and a US$1.00 billion convertible senior notes issue, following a landmark five-year, US$9.70 billion AI data center capacity deal with Microsoft and new long-term contracts with other cloud customers.
  • By pairing these large contract wins with substantial equity and convertible debt financing, IREN is reshaping its balance sheet and funding an ambitious shift from primarily Bitcoin mining toward becoming a scaled AI infrastructure and data center provider.
  • We’ll now examine how IREN’s US$9.70 billion Microsoft AI cloud contract and related capital raises reshape its pre-existing investment narrative.

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IREN Investment Narrative Recap

To own IREN today, you need to believe that it can successfully pivot from a volatile Bitcoin mining core to a durable AI infrastructure and data center business, anchored by long term hyperscaler and cloud contracts. The Microsoft AI deal looks like the key near term catalyst, while execution and funding risk around the huge capex build remain the biggest overhang. The latest US$2.63 billion in equity and convertible issuance directly affects both sides of that equation.

The most relevant recent announcement is IREN’s US$2.3 billion convertible senior notes deal paired with the US$1.63 billion equity raise, which together refinance existing notes, extend debt maturities, and fund its AI data center rollout. For investors focused on catalysts, this financing package helps support the Microsoft contract build out but also heightens dilution and leverage sensitivities if AI demand or Bitcoin driven cash flows do not keep pace with spending.

Yet behind the growth story, investors should be aware that IREN’s heavy, debt funded data center and GPU build could rapidly outstrip operating cash flows if...

Read the full narrative on IREN (it's free!)

IREN's narrative projects $1.5 billion revenue and $1.0 billion earnings by 2028.

Uncover how IREN's forecasts yield a $81.85 fair value, a 86% upside to its current price.

Exploring Other Perspectives

IREN 1-Year Stock Price Chart
IREN 1-Year Stock Price Chart

Twenty fair value estimates from the Simply Wall St Community span roughly US$12 to US$108 per share, underlining how far opinions can spread. Against this wide range, IREN’s ambitious, debt funded AI and data center expansion highlights why you should compare multiple viewpoints before deciding how its growth plans might affect future performance.

Explore 20 other fair value estimates on IREN - why the stock might be worth over 2x more than the current price!

Build Your Own IREN Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

  • A great starting point for your IREN research is our analysis highlighting 4 key rewards and 4 important warning signs that could impact your investment decision.
  • Our free IREN research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate IREN's overall financial health at a glance.

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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.