Institutional Investors Make Major Bet on IREN’s AI Pivot

IREN AU0000185993

A significant wave of institutional investment is reshaping the landscape for IREN Limited, signaling a potential turning point for the Bitcoin mining and AI cloud infrastructure provider. After a challenging December that saw its shares decline by approximately 21%, the stock has rebounded, trading near $46.74 following a strong week. This resurgence is underpinned by a notable vote of confidence from major funds.

Leading the charge, Hood River Capital Management established a new position valued at $74.2 million. This move was not an isolated event. Other institutional players, including X Square Capital, have concurrently increased their holdings in IREN. The collective activity has pushed institutional ownership of the company's free-floating shares above 41%, a figure that continues to climb.

This influx of sophisticated capital arrives at a pivotal moment, suggesting that valuation concerns which contributed to the year-end sell-off are subsiding. Investor confidence appears to be anchored by a transformative, long-term partnership. In November 2025, IREN secured a $9.7 billion AI cloud contract with Microsoft, fundamentally altering its market perception from a pure-play Bitcoin miner to a high-performance computing (HPC) infrastructure partner for hyperscalers.

Financial Performance and Expansion Plans

The financial impact of this strategic shift is already materializing. For the first quarter of fiscal year 2026 (ending September 2025), IREN reported revenue of $240.3 million—a staggering year-over-year increase of 355%. The company is aggressively scaling its operations, with plans to expand its GPU fleet to 140,000 units by the end of 2026. This expansion is targeted to generate an annualized revenue run-rate of $3.4 billion from the AI cloud segment alone.

Key Operational Milestones:
* Secured power capacity for data centers now totals 3 gigawatts.
* The 1.4-gigawatt Sweetwater project is scheduled to come online in April 2026.
* A $2.3 billion convertible note was successfully placed in December 2025.
* Revenue growth exceeding 90% is anticipated for the full fiscal year 2026.

This robust infrastructure framework distinguishes IREN from conventional cryptocurrency mining firms such as Marathon Digital. While the latter remain highly exposed to Bitcoin price volatility, IREN's model is increasingly leveraged to the structural, long-term demand for computational power driven by artificial intelligence applications.

Valuation Context and Technical Outlook

At a price-to-earnings (P/E) ratio of approximately 23, the valuation may appear rich at first glance. However, analysts note that this multiple becomes more reasonable in context when considering the company's secured power pipeline and contracted revenue streams, especially in comparison to pure-play AI infrastructure peers. The $2.3 billion raised in late 2025 provides a substantial war chest to fund its capital-intensive growth roadmap without immediate dilution.

From a chart perspective, the equity is now testing a key resistance level around $50. A decisive and sustained breakout above this threshold could pave the way for a move toward the 2025 high of $76.87. The upcoming release of second-quarter results in early February will be closely watched; market experts currently project full-year earnings per share of around $0.79. The primary focus for investors will be IREN's execution capability, specifically its ability to adhere to the ambitious timelines for bringing its new data center capacity online.