IREN’s Strategic Pivot Gains Momentum with Major Microsoft Agreement

A landmark $9.7 billion agreement with Microsoft has fundamentally repositioned infrastructure specialist IREN, signaling a dramatic strategic shift from its Bitcoin mining roots toward becoming a significant player in the AI infrastructure landscape. This multi-year contract provides substantial financial visibility through 2030 and underscores a profound transformation in the company's business model.

The Microsoft partnership, spanning five years, commits IREN to supply 200 megawatts of AI computing capacity directly from its Childress, Texas facility. A crucial aspect of this arrangement is Microsoft's commitment to provide 20% of the total contract value as an upfront payment, injecting immediate capital to fund IREN's aggressive infrastructure expansion.

Once fully operational, this single agreement is projected to generate approximately $1.9 billion in annual recurring revenue. This represents a monumental scale-up from the company's current position, where it reported just $7.3 million in AI cloud services revenue during the first quarter of fiscal year 2026.

Record-Breaking Quarterly Performance

Recent financial results demonstrate the accelerating pace of IREN's transformation. First-quarter fiscal 2026 revenue surged 355% to $240.3 million. More significantly, the company swung dramatically from a $51.7 million loss in the same quarter last year to a $384.6 million profit.

Adjusted EBITDA saw an extraordinary increase of 3,568%, reaching $91.7 million. While Bitcoin mining still contributed the majority of current revenue at $232.9 million, the AI segment is expanding rapidly and is positioned to become the company's primary revenue driver.

Should investors sell immediately? Or is it worth buying IREN?

Ambitious Scaling Targets

IREN has established an aggressive expansion timeline, targeting deployment of 140,000 graphics processing units (GPUs) by the end of 2026. This infrastructure is expected to support annualized cloud revenue of $3.4 billion. The company is executing this plan through significant data center expansions at Childress and other locations, utilizing liquid-cooled systems and 100-megawatt superclusters.

With control over nearly three gigawatts of power capacity across North America, IREN currently requires only 16% of these resources for its planned GPU expansion, leaving substantial capacity for future growth opportunities. Beyond Microsoft, the company has secured additional multi-year contracts with clients including Together AI, Fluidstack, and Fireworks AI.

Market Analysts Offer Divergent Perspectives

Financial experts remain divided on IREN's prospects. Cantor Fitzgerald has designated the company as a "Top Pick" and projects long-term share price appreciation to $384, compared to its current trading level around €52. Conversely, HC Wainwright maintains a cautious stance, highlighting "significant execution and financial risks" associated with the ambitious 2026 revenue targets.

The company's financial position appears solid, with $1.8 billion in cash reserves, $1 billion from convertible notes, and $400 million in GPU financing providing substantial resources for expansion. The central question remains whether IREN can successfully implement this massive strategic transformation within its ambitious timeframe.