IREN Piles on $2.6B Debt and $248M Loss to Chase a $3.7B AI Dream

IREN posts $247.8M loss as it pivots from Bitcoin mining to AI cloud services, securing $3.1B in contracts with Microsoft and Nvidia; stock surges 603%.

IREN is betting the house on artificial intelligence infrastructure — and the numbers are as dizzying as the stock's 603% rally over the past twelve months. The Sydney-based company reported a net loss of $247.8 million for its fiscal third quarter, as revenue slumped 22% sequentially to $144.8 million. Yet investors shrugged off the red ink, sending shares up nearly 7% to €50.30 on Thursday.

The contradiction is easy to explain: IREN is in the middle of a radical pivot away from Bitcoin mining, and the market is buying the long-term vision. Management has already locked in $3.1 billion in annual recurring revenue contracts for AI cloud services, out of a 2026 target of $3.7 billion. Microsoft is the anchor client, and Nvidia will supply its new air?cooled Blackwell chips starting in early 2027.

To fund the transformation, IREN just upsized a convertible bond offering from $2 billion to $2.6 billion. The notes carry a 1% coupon, mature in 2033, and have an initial conversion price of roughly $73. To mitigate dilution for existing shareholders, the company is spending a three?digit million sum on capped-call transactions that effectively raise the conversion ceiling above $110.

The cash infusion comes on top of $2.6 billion in reserves the company held at the end of April. That war chest is financing a massive expansion of GPU capacity. IREN aims to deploy 150,000 graphics processors in total, with the first 50,000 scheduled for delivery in the second half of 2026. The Sweetwater campus in Texas has already come online in its initial phase.

Meanwhile, the old mining business is being wound down. Bitcoin?related revenue plunged 34% quarter over quarter as IREN disabled legacy mining rigs to make room for new AI hardware. The operating profit from the core business still stood at nearly $60 million, but the costs of the restructuring wiped it out and more.

The market’s enthusiasm is not universal. Short sellers hold about 18% of the free float, betting on a pullback from a stock that has already surged 603% over the past year — and that is up 38% year?to?date. Extreme volatility is baked in: the stock’s 30?day realized volatility is 118%.

Wall Street analysts are split. Macquarie rates the stock a buy with a $90 price target, citing structural growth in digital infrastructure. JPMorgan maintains an "underweight" rating and a $46 target, warning of risks from the circular nature of the large hardware procurement deals.

The convertible note settlement is expected on Thursday. With $2.6 billion of fresh debt added to the balance sheet and a net loss that more than doubled from the prior quarter, IREN is running a high?wire act — one that investors so far are betting will end in a profit?generating AI empire rather than a smoldering pile of GPUs.