IREN Raises $3 Billion in Convertible Bonds as AI Pivot Accelerates, Yet Stock Tumbles on Dilution Fears

Former bitcoin miner IREN raises $3B in convertible bonds to fund AI infrastructure pivot, with Microsoft and Nvidia partnerships, but dilution concerns send shares down 8.5%.

The former bitcoin miner IREN is executing one of the most aggressive corporate transformations in the infrastructure space, but the market’s applause comes with a heavy dose of skepticism. On Friday, shares slid 8.5 percent to €45.63 after the company closed a $3 billion convertible bond offering — originally planned at $2 billion but upsized twice due to strong demand. The selling pressure reflects mounting dilution concerns: the number of outstanding shares has already grown by roughly half over the past year, and the new notes will only add to that count if converted.

That debt is being deployed to fund a sweeping pivot from cryptocurrency mining toward artificial-intelligence computing. In its most recent quarter, IREN’s AI cloud revenue doubled to $33.6 million, while bitcoin revenue deliberately shrank as the company retired older hardware. The long-range target is an annualized recurring revenue of $3.7 billion by the end of 2026, a goal that depends heavily on the timely completion of several mega-projects.

The centerpiece of that effort is the Sweetwater 1 data center in Texas, a 1.4-gigawatt facility designed to house more than 700,000 GPUs. Microsoft has already signed a 750-megawatt capacity deal with IREN, a contract valued at $9.7 billion. Equally important, IREN has locked in a five-year arrangement with Nvidia that gives the chipmaker the right to purchase up to $2.1 billion of IREN’s equity at $70 per share. The Nvidia partnership will anchor the Sweetwater campus and extend to future sites.

IREN is also planting a flag in Europe. The company has agreed to acquire Spanish data-center developer Ingenostrum, adding a 50-person local team and securing 490 megawatts of grid-connected capacity. Spain’s abundant renewable energy and supportive regulatory environment make it an attractive hub for large-scale AI facilities. The acquisition brings IREN’s total global power pipeline to five gigawatts — a resource management calls the firm’s most valuable asset in a market where compute capacity is scarcer than hardware.

The build-out schedule is ambitious. By 2026, IREN expects to complete projects Horizon 1 through 4, delivering 480 megawatts of active capacity. The following year, Childress Horizons 5 and 6 should lift the total to 1,210 megawatts. Air-cooled GPUs are already being installed in British Columbia, with additional shipments planned for the second half of 2026.

But the rapid expansion has produced extreme price swings. The shares trade well above their 200-day moving average of €36.41, and a golden cross in early May — when the 50-day average crossed above the 200-day — initially brightened the technical picture. Yet the annualized 30-day volatility stands at over 120 percent. Analyst opinions diverge sharply: BTIG rates the stock a buy with an $80 target, Goldman Sachs is neutral at $44, and JPMorgan recommends underweighting.

IREN is now in a critical transition. The legacy bitcoin business is fading, and the new AI contracts must scale quickly to service the massive debt load. Whether Sweetwater 1 comes online as scheduled and the 2026 revenue targets prove reachable will be key questions when the next quarterly report arrives. For now, the market is pricing in both enormous potential and equally enormous risk.