It's been a rough week for the artificial intelligence (AI) trade, and shareholders of data center owner and operator Iren Limited (IREN +2.20%) felt the pain. After riding the AI wave to an all-time high of $76 per share, the stock is now more than 35% off that mark.
That crash includes this week's sharp 22% drop as of Friday morning trading, according to data provided by S&P Global Market Intelligence.
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Bitcoin miner turned AI infrastructure play
Iren has successfully pivoted its business from a Bitcoin mining operation to utilizing those data center assets for AI infrastructure needs. Its timing has been good, as demand for compute power needed for AI has soared. Revenue in its recently reported fiscal 2026 first quarter jumped 355% year over year.
Iren even reported a record $385 million profit for the period. But as the AI trade unwound this week, astute investors noticed there was more to the Iren story. That reported profit included unrealized gains related to convertible notes issued by the company.
While capital spending plans remain on track, with new data centers scheduled to open early next year and in 2027, Iren is counting on more than operating cash flows to fund those investments.
NASDAQ: IREN
Key Data Points
The company announced a recent, multiyear deal with Microsoft to provide the tech giant with AI cloud services for nearly $10 billion. Iren is relying on prepayments from that deal for some cash needs.
With investors beginning to question whether all the announced AI infrastructure investments will actually materialize, Iren's stock is one that was caught in the uncertainty this week. After a sharp run higher over the past six months, many investors this week are deciding to limit risk and take profits. That may be the smart trade until AI investment clouds clear.
