Iris Energy Shares Extend Decline Amid Funding Concerns

IREN AU0000185993

The equity of Bitcoin mining and data center operator Iris Energy (IREN) continues to face significant downward pressure. After an 11.6% drop on Monday, the sell-off persisted into Tuesday, with shares briefly falling to $33.34. This price level represents a decline of approximately 54% from the record high of $76.87 reached in early November, following the announcement of a multi-billion dollar agreement with Microsoft.

November's news of a $9.7 billion GPU cloud contract with Microsoft ignited investor excitement, sending the stock soaring. However, the initial euphoria has given way to a more sober assessment of the deal's practical implications. Market focus has now shifted to the substantial capital investments required to fulfill the contractual obligations.

Analysts estimate the company faces a funding gap of around $2.7 billion. There is growing concern that, without securing additional capital, Iris Energy may struggle to deliver on the promised infrastructure projects. This realization has markedly shifted market sentiment.

Adding to the negative pressure, prominent investor Paul Tudor Jones drastically reduced his stake in Iris Energy by over 90%. Many market participants interpret this move as a signal of waning institutional confidence.

Mixed Signals from Analyst Community

Despite the bleak price action, not all market observers are pessimistic. Investment bank B. Riley reaffirmed its Buy rating on Tuesday, maintaining a $74 price target. Their analysts contend that Iris Energy has access to $8.85 billion in capital, which includes the upfront payment from Microsoft. They characterize the recent sell-off as sentiment-driven rather than based on deteriorating fundamentals.

The broader analyst consensus presents an average price target of $72.56, still well above the current trading level but more cautiously framed than in previous weeks. The underlying message is clear: without tangible progress on execution, these valuations remain theoretical.

Facing Headwinds from Both Bitcoin and AI Sectors

Iris Energy's weakness is not occurring in isolation. The stock is caught in a crosscurrent of sector-specific pressures. On one side, disappointing quarterly results from Oracle, which revealed high AI expenditures without proportional revenue growth, have made investors more skeptical of so-called "AI proxy" stocks. Concurrently, a retreat in the Bitcoin price from highs above $126,000 to recent levels around $85,000 is dampening business expectations for the company's mining segment.

From a technical analysis perspective, the share price has breached key support levels at $48 and $40. The next significant psychological barrier now sits at the $30 mark.

All eyes are now on the quarterly report scheduled for February 11, 2026. Market participants anticipate that this release will provide much-needed clarity regarding capital deployment plans and the timeline for delivering on the Microsoft agreement.