IREN’s $2.1 Billion Nvidia Option and a $625 Million Software Bet Mask a Messy Quarter

IREN shares surge 34% weekly after Nvidia's $3.4B deal and Mirantis acquisition, but a 34% revenue miss triggers sharp volatility as the bitcoin miner pivots to AI cloud.

The market can’t decide whether IREN is a bitcoin miner in transition or a hyperscaler-in-waiting. This week, it got evidence for both cases—and the shares swung violently as a result.

After closing at €51.91 on Friday with a 7% daily gain, IREN’s stock now sits nearly 60% higher than a month ago and well above its 200-day moving average of €35.58. The weekly performance was even more dramatic: a 34% surge on euro terms, and a staggering 740% year-on-year gain from the 52-week low. But the path to those numbers was anything but smooth.

The Nvidia Deal That Changed Everything

The week’s defining moment came on May 6, when IREN announced a five-year partnership with Nvidia valued at $3.4 billion. Under the agreement, Nvidia gains access to managed GPU cloud services for its internal AI workloads, and both companies plan to build up to five gigawatts of infrastructure using Nvidia’s DSX designs.

More striking was the equity component: Nvidia secured the right to purchase up to 30 million IREN shares at $70 apiece over five years—a potential $2.1 billion investment. The stock shot up 27% to $72.09 on the news.

The deal adds to an already impressive pipeline. IREN now has $3.1 billion in annualized recurring revenue under contract, including $1.9 billion from Microsoft and $700 million from Nvidia for Blackwell GPUs scheduled to ramp in early 2027.

Mirantis Fills the Software Gap

Just a day earlier, IREN signed a $625 million all-stock deal to acquire Mirantis, a Kubernetes and container orchestration specialist serving over 1,500 enterprise customers. The acquisition, still subject to regulatory approval, plugs a critical gap: bare-metal compute capacity alone doesn’t cut it in the AI cloud market. Mirantis brings the software layer that lets IREN sell directly to corporate clients rather than relying on intermediaries.

The all-stock structure, however, dilutes existing shareholders—a risk analysts have flagged. The actual value of the deal also fluctuates with IREN’s share price, adding another layer of uncertainty.

Earnings Miss the Mark

The euphoria from those announcements collided with reality on May 7, when IREN reported fiscal third-quarter results for 2026. Revenue came in at $144.8 million, missing the consensus estimate of roughly $220 million by 34%. The net loss per share was $0.30.

The culprit is the ongoing transformation. Bitcoin mining revenue slumped to $111.2 million from $167.4 million in the prior quarter as IREN deliberately shut down older hardware. Non-cash impairment charges of $140.4 million further weighed on the bottom line.

The bright spot: AI cloud revenue jumped 94% quarter-over-quarter to $33.6 million. Adjusted EBITDA reached $59.5 million with a 41% margin. The company also holds $2.6 billion in liquidity.

The stock initially fell nearly 7% in regular trading on May 7, followed by additional losses in after-hours trading.

European Expansion and a Massive Buildout

IREN also announced the acquisition of Nostrum Group, a data center developer in Spain, securing 490 megawatts of capacity as its first foothold in Europe.

The company’s growth targets are ambitious. For 2026, IREN aims for 480 megawatts of capacity with 150,000 GPUs and $3.7 billion in annual revenue. By 2027, total capacity should reach 1,210 megawatts, and by 2028, five gigawatts—ten times current levels.

At the Childress site in Texas, over 2,600 construction workers are already on the ground. The first supercluster handover to Microsoft is scheduled for the third quarter of 2026.

Analyst Divergence and the Risk Picture

Eleven analysts rate IREN a buy, with price targets ranging from $29 to $85—a spread that reflects deep uncertainty about the transformation story. Bernstein has a $75 target and a “Buy” rating.

The risks are real. Convertible bonds worth $3.7 billion sit on the liability side. The transition from mining to AI infrastructure is compressing near-term revenue. And the Mirantis integration, combined with the massive buildout schedule, leaves little room for execution missteps.

For now, the market is betting on the long-term vision. Whether IREN can deliver the construction milestones on time and absorb Mirantis smoothly will determine whether the stock holds its recent gains—or gives them back.