From Bitcoin to AI: IREN’s $2.6B Convertible Note Fuels a Radical Restructuring

IREN upsizes convertible bond to $2.6B, acquires Mirantis and Nostrum, signs Microsoft and Nvidia deals; aims $3.7B ARR by 2026 despite mining drag and net loss.

IREN has pulled off one of the most aggressive capital moves in the crypto-to-AI pivot playbook. The former Bitcoin miner upsized a planned $2 billion convertible bond offering to $2.6 billion, locking in a 1.00% coupon on unsecured senior notes due December 2033. The conversion price of roughly $73.07 per share represents a 32.5% premium over the prior closing price, while a capped-call transaction with an initial cap of $110.30 limits dilution for existing holders. Net proceeds are expected to land near $2.57 billion, with a potential upside to $2.96 billion if the overallotment option is fully exercised. Settlement is scheduled for May 14.

The cash injection is earmarked for a sweeping transformation: IREN is redirecting its infrastructure from Bitcoin mining to high-performance computing and AI cloud services. To speed up that shift, the company has struck two acquisition deals. Mirantis, a software and infrastructure specialist, will be bought for roughly $625 million, while European outfit Nostrum Group is set to join for an estimated €165 million. These purchases are designed to plug gaps in software expertise and operational depth that a pure-play miner lacks. On the ground, the Sweetwater campus in Texas is the flagship: 1.4 gigawatts of capacity and space for more than 700,000 liquid-cooled GPUs. By the end of 2026, IREN intends to have around 150,000 GPUs deployed there.

Already, the client roster signals ambition. A multi-year contract with Microsoft is valued at $9.7 billion, and a partnership with Nvidia adds another $3.4 billion in cloud revenue. Nvidia also holds an option to invest up to $2.1 billion in IREN shares at $70 each. Management is targeting $3.7 billion in annualized recurring revenue by late 2026, a figure that would give the high valuation some tangible support.

Yet the legacy mining business still exerts a drag. In the most recent quarter, total revenue came in at $144.8 million, well short of the $219.87 million analysts had expected. The AI cloud segment, however, showed momentum: revenue surged 839% year on year to $33.6 million, and climbed 94.2% sequentially. The bottom line tells a harsher story: a net loss of $247.8 million, partly driven by $140.4 million in impairment charges on mining equipment. IREN has been retiring mining infrastructure to free up power for the AI buildout, but the transition is costing near-term earnings.

Analyst sentiment reflects the tension. Bernstein remains the most bullish with a $100 target, pointing to a secured power pipeline of 5 gigawatts. H.C. Wainwright raised its target to $85, citing improving revenue visibility from new contracts. On the other side, JPMorgan holds an Underweight rating and a $46 target, warning about deal structures and GPU access risks. Cantor Fitzgerald, while Overweight, trimmed its target from $82 to $61 in April, and Freedom Capital Markets started coverage with Hold and a $36 target, flagging execution risk in the pivot from crypto to AI.

In Frankfurt, the stock traded around €47.96 on Tuesday, up 2.16% on the day, and has surged more than 580% over twelve months. That run already prices in much of the promise. The $2.6 billion note gives IREN both time and money to prove the thesis — but it also raises the stakes. Every delay in GPU availability or power hookup will test the financing structure and the company’s ability to convert contracts into cash. The next few quarters will show whether the convertible bet was a bridge to a new business model or a costly detour.