Shares of IREN (IREN +12.14%) soared over 20% this week, according to data from S&P Global Market Intelligence. A cryptocurrency miner transitioning to running cloud data centers for artificial intelligence (AI) has received two analyst upgrades and has been popular among retail traders. It also has a long-term contract with Microsoft worth billions of dollars.
As of this writing at 11:27 AM on Friday, Jan. 16, IREN stock is up 21.6% this week. Here's why, and whether the stock is a buy right now.
NASDAQ: IREN
Key Data Points
Analyst upgrades, AI possibilities
On Monday, Bernstein named IREN a top AI stock for 2026. On Tuesday, H.C. Wainwright upgraded the stock to a buy due to its successful pivot from Bitcoin mining to an AI cloud provider. These two analyst upgrades were the catalyst for IREN's stock price to start running this week.
The company is a Bitcoin miner but is transitioning its data centers to become an AI cloud provider. It signed a whopping $9.7 billion contract with Microsoft earlier this year, which was the catalyst that sent the stock into the stratosphere, up close to 400% in the last year alone.
However, if you look at IREN's business today, it is making barely any revenue from AI cloud services. Last quarter, AI cloud revenue was only $7.3 million, which is a sliver of the entire cloud computing infrastructure industry. Investors are betting big on the future of IREN stock, which is becoming wildly popular in online investing communities on X and Reddit.
Image source: Getty Images.
Time to buy IREN stock?
After its massive run this year, IREN stock now trades at a market cap of $16 billion. This is a giant premium for a business that is generating less than $10 million in revenue a quarter from the segment of the future, AI cloud computing.
It does have a massive contract from Microsoft, but that will take many years to develop, and with massive build-out costs. Many years will pass before IREN can garner enough scale to generate a profit from AI cloud computing, if it ever gets there. Valued at a massive premium to its trailing AI revenue, investors would be smart to avoid buying IREN stock right now.
