A Look At IREN (IREN) Valuation After Earnings-Driven AI Pivot Raises Execution Concerns

IREN (NasdaqGS:IREN) shares came under pressure after its latest quarterly earnings, as weaker revenue and a sizeable net loss coincided with a faster shift away from bitcoin mining toward AI cloud infrastructure.

See our latest analysis for IREN.

The latest earnings drop and concern about funding needs have hit sentiment hard, with a 7 day share price return of a 21.19% decline and a 90 day share price return of a 27.10% decline, even though the 1 year total shareholder return is 225.27% and the 3 year total shareholder return is very large. Recent momentum therefore looks weaker compared to the longer term climb.

If IREN's AI pivot has caught your attention, it could be worth broadening your search with our screener of 33 AI infrastructure stocks to compare other data center and compute names building out capacity.

With IREN now posting a sizeable quarterly loss, a sharp pullback in the share price, and a major AI build backed by Microsoft and GPU financing, the key question is whether pessimism has gone too far or if markets are already pricing in the next phase of growth.

Most Popular Narrative: 55.9% Undervalued

With IREN last closing at $41.83 and the most followed narrative pointing to a fair value of $94.84, the gap between price and story is wide and very specific about why.

What’s most exciting is that this massive Microsoft deal, worth $9.7 billion in total value, utilizes only 16% of IREN’s secured power portfolio. Waiting in the wings is the Sweetwater site, a 2,000MW giant scheduled for energization in April 2026. If 200MW creates a ~$10B contract, the latent value of the 2GW pipeline is staggering.

Read the complete narrative.

Curious how a single customer contract, a multi gigawatt power pipeline, and specific margin assumptions line up to justify that fair value? The narrative spells out the revenue mix, profitability profile, and timing that underpin the $94.84 figure, but keeps some punchy growth and pricing expectations buried in the details.

Result: Fair Value of $94.84 (UNDERVALUED)

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

However, this story still hinges on IREN delivering its large AI build on time and managing funding needs so that shareholder dilution does not become a bigger drag on returns.

Find out about the key risks to this IREN narrative.

Another Way of Looking at the Price

That $94.84 fair value from the narrative is one side of the story. On plain P/E, IREN trades at 35.7x, which is higher than the US Software average of 26.9x and above its own fair ratio of 14.3x. Peers sit around 52.2x. So is this a premium worth paying, or a valuation that needs justification from future execution?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own IREN Narrative

If you see the story differently or prefer to rely on your own work, you can build and stress test your version in minutes with 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.

Ready for more stock ideas?

If IREN has sharpened your thinking, do not stop here. Broaden your watchlist with a few focused ideas that could sharpen your next move.

• Spot potential value plays early by checking out our 52 high quality undervalued stocks, filtered for strong fundamentals and pricing that may not fully reflect them yet.
• Prioritise resilience and sleep a little easier with our 84 resilient stocks with low risk scores, which highlights companies with more defensive risk profiles.
• Hunt for off the radar opportunities using our screener containing 24 high quality undiscovered gems, which flags quality names not yet crowded with attention.

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.

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