Artificial intelligence (AI) infrastructure names were all the rage in 2025. Iren Limited (IREN 1.67%) was one big beneficiary. It seemed to be in the right place at the right time. Its cryptocurrency mining infrastructure was already in place and able to help fund the expansion of building additional server-filled data centers for AI compute use.
Some investors locked in profits in December, though, with shares dropping 21% for the month, according to data provided by S&P Global Market Intelligence.
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From crypto to AI
Iren started as a Bitcoin mining company, using server-filled data centers. As demand for compute capacity from data centers has exploded, the company has shifted its focus toward high-performance AI computing. A steady flow of revenue from the crypto mining operation helped Iren transition more quickly by providing the resources to build and operate a fully integrated AI cloud complex. Those funds are helping Iren replace existing custom-designed microchips used for Bitcoin mining with AI graphics processing units (GPUs).
The company reported revenue of $240 million in its fiscal 2026 first quarter period ended Sept. 30, 2025. That represents a massive 355% increase compared to the same quarter in the previous year. Management expects high growth rates to continue. They are aiming to achieve a $3.4 billion annual revenue run rate in AI cloud by the end of 2026.
Iren is building additional new data centers, in part to satisfy a $9.7 billion, multi-year AI cloud contract with Microsoft that it announced last year. Hyperscalers like Microsoft are seeking purpose-built compute infrastructure for demanding, enterprise-scale AI training and inference as Iren provides.
NASDAQ: IREN
Key Data Points
The December slump
Investors loved that pivot given the soaring demand for AI infrastructure capacity. Iren shares nearly quadrupled in 2025. Investors may have wanted to lock in gains, considering the stock's risk level, which helped explain the December plunge.
Iren has several ongoing infrastructure projects and is spending a substantial amount of capital beyond what revenue from crypto mining generates. Debt should be a concern for any investor who wants to own the AI cloud infrastructure companies. They are spending capital on the front end, largely counting on tech partners to follow through on mult-year business deals.
Iren recently closed on a new $2.3 billion convertible notes offering. Some of that capital is being used to repurchase higher-cost debt, however. And Iren does have a strong capital structure and funds its growth through various sources. Still, investors need to have an appropriate risk appetite with Iren and other AI data center owners.
Iren ended its most recent quarter with $1.8 billion in cash and equivalents, though, and expects near-term capital expenditures to be covered by a combination of that cash, operating cash flow, and prepayments from the Microsoft deal. That made the December stock slump an opportunity for some investors. Shares have surged nearly 30% to start 2026, so interested investors might want to wait for another downturn before jumping back in.
