IREN (IREN -1.69%) is worth about $15 billion as of this writing, with the stock around $41 after climbing another 4% on Tuesday. In July, the artificial intelligence (AI) cloud infrastructure company announced $2.8 billion in new customer contracts -- multi-year deals to supply AI developers with computing power. That's one announcement worth nearly a fifth of the entire company's market value.
These aren't small customers, either. IREN's customer list now includes Microsoft, Nvidia, and Perplexity, among other AI developers.
And yet shares would still have to climb about 85% just to get back to the $76.87 they touched within the past year. A company signing contracts this fast, valued this far below its own recent peak, is worth a closer look.
Image source: Getty Images.
A $4 billion run rate, mostly signed
The July announcement did more than add contracts. Alongside the $2.8 billion in new deals, which span both bare-metal computing and managed cloud services, IREN raised its target for year-end AI cloud annualized run-rate revenue from $3.7 billion to more than $4 billion.
The detail that matters most, I think, is that about 85% of the new target was already under contract. After all, a revenue goal is easy to raise. Signed customers are not.
The capacity behind those commitments is scaling just as fast. A year ago, IREN had built about 3 megawatts of AI cloud capacity. It now has 480 megawatts being delivered in 2026, and it's targeting 1.2 gigawatts in 2027. That's a build-out of more than a hundredfold in about two years, for demanding customers, on committed timelines.
The company is also assembling more than raw computing power. On Tuesday, IREN completed its acquisition of Mirantis, a cloud software company serving more than 1,500 enterprise customers. Mirantis developed a software platform for managing AI workloads that works with Nvidia's software stack, and IREN says the deal has already played a part in several of its announced and prospective cloud contracts.
"Mirantis adds the software layer on top, turning infrastructure into a platform," co-CEO Daniel Roberts said in the announcement.
NASDAQ: IREN
Key Data Points
The income statement hasn't caught up yet
Now for the sobering half. IREN's revenue over the trailing 12 months was $757 million. That's up 105% year over year -- and still less than a fifth of the run rate the company is targeting for year-end.
To be clear, the target is an annualized pace, not a promise of $4 billion of revenue this year. But the gap between $757 million of trailing revenue and a $4 billion run rate measures how much building and delivering still has to happen before the contracts become results.
That kind of expansion is enormously capital-intensive. Data centers and the graphics processing units (GPUs) that fill them cost billions of dollars, and IREN paid for Mirantis mostly with stock -- about 12.6 million newly issued shares, or about 3.5% of the company, plus about $40 million in cash and other consideration. Investors should probably expect more dilution, more debt, or both as the spending accelerates.
Concentration adds risk, too. A customer list of about 10 AI developers means a single delay or renegotiation could move the numbers meaningfully. And the AI cloud business is crowded with rivals (from the hyperscale giants to other fast-scaling specialists) competing for the same workloads.
Of course, the ratio is striking. Signed commitments approaching a fifth of the company's market value, with the run-rate target 85% contracted, are the sort of evidence that separates IREN from AI names running mostly on promise. If the company delivers, today's price could end up looking conservative.
But a contract is a promise to deliver, and delivery at this scale is the part IREN hasn't yet proven. The company signed up some of the most demanding customers in technology while multiplying its capacity a hundredfold, all at once. Plenty can go wrong between here and a $4 billion run rate.
Expect volatility either way. The stock has traded between $15.49 and $76.87 over the past year -- a range that says investors keep changing their minds about what this company is worth.
So I'm not buying yet. If the next couple of quarterly reports show AI cloud revenue landing on schedule, with the run rate climbing toward that $4 billion target as capacity comes online, I'd get interested. Until then, I'm watching.
