Not that long ago, Iren (IREN +0.84%) enjoyed a monumental bull run, soaring from $5 to $76 in less than a year. That euphoric momentum has been depleted. The stock has crashed by 54% from its all-time high, but the long-term picture is stronger than ever. Here's why Iren looks like a buy despite strong pessimism from retail investors.
Capital raises are causing investors to ignore long-term catalysts
No one likes it when their stock gets diluted, and it can cause investors to scramble. Iren has been raising money through loans with competitive rates for a while, but its at-the-market equity program of up to $6 billion drew skepticism.
NASDAQ: IREN
Key Data Points
Iren currently has a $11 billion market cap, so this proposal can result in the dilution of half of its shares. However, it's not guaranteed to happen right away. Iren can theoretically wait until its market cap is much higher before tapping into the at-the-market equity program, which would result in less dilution.
The company operates in an industry that requires significant capital, but these issues will become more manageable as Iren signs more deals. Its landmark five-year $9.7 billion deal with Microsoft for 200 megawatts of capacity at its artificial intelligence (AI) data center captured headlines in November. While many investors have become impatient due to the lack of additional deals, Iren still has the gigawatts, land, and AI data centers that serve as the foundation for AI growth.
Image source: Getty Images.
Iren grew its gigawatt pipeline in the first quarter
Although Iren didn't announce a new deal with a tech giant in the second quarter of fiscal year 2026, which ended Dec. 31, 2025, it secured a 1.6 gigawatt site in Oklahoma, boosting its total pipeline to more than 4.5 gigawatts. Energy is a major constraint in AI, and with Iren securing $1.94 billion per year for 200 megawatts in its deal with Microsoft, it's easy to see how much its revenue can scale.
Iren can support more than 20 additional deals like the Microsoft one, which can eventually translate into over $40 billion in annual recurring revenue. It will take a while for Iren to reach that level, since some of its AI data centers aren't yet complete, but more capacity will become available over time.
The expansion of Iren's gigawatt pipeline is a major catalyst for new deals, and Iren doubled down by entering into a purchase agreement for more than 50,000 Nvidia chips. These aren't the moves of a struggling company. Iren is maximizing its ability to sign as many lucrative deals as possible. Its 6% APR for $3.6 billion in GPU financing related to the Microsoft contract shows that lenders also believe in Iren's future.
The lack of a deal and the high-capital nature of Iren's business have rattled some investors, but this was never a stock to buy and hold for a few months. It's a multiyear play in one of the hottest industries right now, making it a stock to watch closely.
