IREN’s $3 Billion Convertible Bond Fuels a Breakneck Shift from Bitcoin to AI Cloud

Bitcoin miner IREN raises $3 billion in convertible debt to fund AI cloud expansion, signs major deals with Microsoft and Nvidia, despite revenue miss and volatile stock.

IREN, a company once pigeonholed as a pure-play Bitcoin miner, is remaking itself into a provider of high-performance computing and AI cloud infrastructure. The latest proof of that transformation came this week with the placement of a $3 billion convertible note, the largest single financing in the company’s history.

The 1% coupon bond, maturing in December 2033, attracted strong demand and was upsized via a greenshoe option. Net proceeds of roughly $2.96 billion will be used to expand data center capacity across the United States and Europe. The initial conversion price is set at about $73 per share, but management has deployed $200 million of the proceeds into capped-call transactions, effectively raising the conversion threshold above $110. That structure limits dilution for existing shareholders unless the stock climbs significantly higher.

The shares themselves have been on a wild ride. At €49.85, the stock ended Thursday up 5.88% from the prior close and has soared 597% over the trailing twelve months. Year-to-date, the gain stands at 36.69%. Still, the price remains roughly 25% below the record high from November, reflecting the sheer volatility that comes with a business model in mid-pivot. One analyst calculation puts the annual advance at roughly 619%, underscoring the magnitude of the shift in the company’s fortunes.

That pivot has come at a steep cost. In its most recent quarter, IREN posted revenue of $144.8 million, well short of the $219.87 million analysts had projected. Net income swung to a loss of $0.30 per share, versus expectations of a $0.2161 loss, and the bottom line worsened by $231.7 million year-over-year. The net loss for the third fiscal quarter was nearly $248 million. Yet the adjusted EBITDA came in at $59.5 million, with a margin of 41%, signaling that the core operations are generating cash even as heavy capital spending pulls down reported earnings.

The company now holds $2.6 billion in cash and has secured a power portfolio of 5 gigawatts across multiple continents. By the end of 2026, IREN aims to achieve $3.7 billion in annualized AI cloud revenue, backed by 480 megawatts of capacity and 150,000 deployed GPUs. Crucially, $3.1 billion of that recurring revenue target is already under contract. Microsoft alone accounts for $1.9 billion, while a separate deal with Nvidia for air-cooled Blackwell GPUs contributes $0.7 billion, and the Prince George facility adds $0.5 billion. For the Microsoft contract, 95% of GPU expenses are expected to be covered via financing and customer prepayments, and IREN is examining similar structures for another 50,000 GPUs.

Analysts remain deeply split on whether IREN can sustain its rapid expansion. Out of 16 ratings, 11 are buys, 3 holds, and 2 sells. The average price target is $74.07, but the range runs from $41 to $105. Macquarie has an outperform rating with a $90 target, citing the existing AI partnerships. Cantor Fitzgerald rates the stock at $77, also pointing to those agreements. JPMorgan, despite raising its target to $46, keeps an underweight call, while Goldman Sachs nudged its target to $44 and stays neutral.

The risks are plain. Weekly volatility has averaged 16%, a large portion of earnings is non-cash, and the share count has risen 53% over the past year. Execution remains the single biggest question: IREN must convert its contracted AI revenue into actual computing power, recurring sales, and predictable cash flow. With the new $3 billion note and a $2.6 billion cash pile, the company has the firepower to try—but the market will be watching the next quarterly results closely to see whether utilization rates at the new Texas data centers justify the lofty expectations.