IREN lifts AI cloud revenue target to $4B on $2.8B in new deals
IREN Limited has secured $2.8 billion in multi-year AI cloud contracts, raising its annualized revenue target and signaling that its pivot from Bitcoin mining is backed by tangible customer commitments.
IREN Limited has raised its year-end AI Cloud annualized run-rate revenue target to more than $4 billion, up from a previous forecast of $3.7 billion. The upward revision follows $2.8 billion in newly won multi-year cloud services agreements with key AI developers. Shares of the Nasdaq-listed firm surged nearly 20% on July 20 following the announcement.
Roughly 85% of the new $4 billion target is already under contract, providing a concrete foundation for the company's projections. This metric is critical for market participants evaluating the firm's transition from a Bitcoin mining operation to a vertically integrated AI cloud provider. However, the $2.8 billion figure represents total contract value spread over multiple years, not an immediate revenue windfall. Actual GAAP revenue will be recognized incrementally as IREN delivers its services over the life of the agreements.
The company is rapidly scaling its infrastructure to meet these obligations across a customer base that includes hyperscalers, enterprises, and AI developers. IREN is expanding from 3MW of self-built AI Cloud capacity to 480MW delivered this year, with expectations to reach 1.2GW by 2027. Funding this massive buildout appears manageable, as the company held approximately $7.6 billion in cash and cash equivalents as of June 30. Additionally, customer prepayments cover about 45% of related GPU capital expenditures, which meaningfully reduces the capital IREN must source independently.
Wall Street is recalibrating its models to reflect the secured backlog. Freedom Capital expects the company's revenue to "explode" from $717 million this year to $3.1 billion in fiscal 2027 and $8.5 billion in fiscal 2028. Goldman Sachs maintained a Neutral rating and a $50 price target on July 20, estimating that the new contracts represent about $1 billion in additional contracted revenues with an average term of nearly three years.
While Goldman Sachs highlighted tight supply and supportive pricing conditions in the AI sector, its Neutral rating suggests the growth prospects may already be priced in. The multi-year contracts offer clear future visibility, but investors must weigh that certainty against the stock's recent rally.
