IREN Faces a Pivotal Earnings Test as Wall Street Weighs a $9.7 Billion Microsoft Deal Against Persistent Capital Concerns

IREN reports Q3 earnings on May 7 amid a $9.7B Microsoft deal and Jim Cramer's warning on capital needs and speculative risks.

The Australian AI infrastructure provider IREN is heading into its third-quarter earnings report on May 7 with a market cap of roughly $19.4 billion and a stock price of $51.09 — but the narrative surrounding the company is anything but settled. While the company has secured what it calls its largest infrastructure contract to date, a high-profile voice on Wall Street is urging caution.

Jim Cramer, the CNBC "Mad Money" host, recommended taking profits in IREN on April 26, drawing a comparison between the current tech and infrastructure landscape and the volatility of the early 2000s. He labeled the sector "speculative" and pointed to IREN's continuous need for capital as a structural risk for shareholders.

That warning lands at an unusual moment. IREN recently signed a five-year agreement with Microsoft worth $9.7 billion, granting the tech giant access to 200 megawatts of capacity at the company's data center in Childress, Texas. The deal is expected to generate roughly $1.94 billion in annual recurring revenue for IREN.

The company's total secured power capacity across all grid-connected sites now exceeds 4.5 gigawatts. If IREN were to replicate the Microsoft deal's terms across its entire portfolio, the theoretical annual revenue would top $40 billion. But only 460 megawatts of that secured capacity currently supports AI applications — and bridging that gap requires enormous investment.

The Capital Machine

IREN has raised approximately $9.3 billion over the past eight months through customer prepayments, convertible bonds, GPU leasing, and other financing instruments. Goldman Sachs and JPMorgan have provided GPU-backed financing. On top of that, the company maintains a $6 billion at-the-market equity program as an additional liquidity buffer.

This relentless capital raising is exactly what Cramer flagged as a red flag. Yet the company's ambitions remain aggressive. IREN has purchase agreements for over 50,000 NVIDIA B300 GPUs, bringing its total planned fleet to 150,000 units. Deliveries are scheduled in phases through the end of 2026, with deployments across data centers in British Columbia and Texas.

Management has set a target of $3.4 billion in annualized revenue by the end of 2026, with the GPU fleet fully deployed. For the current fiscal year, analysts expect revenue of roughly $1.03 billion, climbing to $3.08 billion in the following year.

A Revenue Roller Coaster

The company's financial trajectory has been anything but smooth. In fiscal 2025, total revenue hit $501 million — a 168% jump from the prior year. But the momentum stalled in the October-to-December quarter, when revenue dropped to $184.7 million from $240.3 million in the previous quarter. The net loss for that period stood at $155.4 million, driven largely by non-cash special items. Adjusted EBITDA fell to $75.3 million from $91.7 million, though it still represented an improvement over the same period a year earlier.

For the new B300 orders alone, IREN plans to invest an additional $3.5 billion in the second half of 2026. The company's goal is to reach an annualized AI cloud revenue of over $3.7 billion by year-end.

Analyst Divergence

The analyst community is broadly constructive but deeply divided on valuation. Among 18 analysts tracked, 72% rate the stock a "buy" and only about 11% recommend selling. But the price targets tell a more complicated story.

Ten analysts see an average target of $62.50 — implying roughly 23% upside — with a range spanning $29 to $82. A broader group of twelve analysts sets a median target of $73.30, with the high end at $125 and the low at $36. That wide spread reflects genuine disagreement over whether IREN can execute on its ambitious expansion plans.

CEO and management have openly discussed scaling constraints, including land acquisition, grid connections, and cooling infrastructure. The company's secured power capacity across all sites is more than 4.5 gigawatts, but only a fraction is currently supporting AI workloads.

What the Market Is Watching

Trading volume on April 26 hit nearly 42 million shares, well above the daily average, suggesting investors are positioning ahead of the earnings release. The key question for the May 7 report is whether IREN can demonstrate concrete progress on its GPU rollout and whether its customer base has expanded beyond the anchor Microsoft deal.

The company has raised billions, secured a landmark contract, and set aggressive targets. But with Cramer's warning echoing in the background and a wide range of analyst expectations, the earnings call will be the first real test of whether IREN's execution can match its ambition.