IREN (NASDAQ:IREN) spent years mining Bitcoin. On August 27, the company told investors that the chapter is closing for good. Fourth-quarter AI cloud revenue more than doubled to $70.5 million, and IREN now has $4 billion in contracted revenue booked against its 2026 capacity, with $1 billion of that already generating cash. The proof point behind those numbers landed in August 2026, when IREN delivered the first phase of a liquid-cooled data center to Microsoft. A company built on crypto mining rigs is trying to convince the market it is now an AI infrastructure company, and the early numbers back that up.
The Money Chasing Every Megawatt
The clearest sign customers believe in IREN’s build-out is how they are paying for it. Recent three-year contracts are pricing above $20 million per megawatt of IT load, a level management said pays back the compute investment in roughly two years, and active discussions for new capacity are running closer to $25 million per megawatt. Customers are also funding the build themselves: prepayments on recent deals cover 45% to 55% of GPU capital spending, money IREN is using to help pay for the data centers those chips sit inside. That confidence is showing up in the financing markets too.
IREN closed $6.5 billion in GPU financing over three months, including $3.6 billion of investment-grade funding at a 6% interest rate tied to the Microsoft contract, plus $2.8 billion in non-investment-grade equipment financing at a 9% fixed rate, anchored by a $2.4 billion facility from Blue Owl and PIMCO for its Mackenzie site. None of IREN’s data centers are pledged against any of that debt, leaving the entire physical portfolio free to borrow against later. The company is also chasing capacity well beyond what is contracted today, with 5 gigawatts of secured grid connections against a 2026 target of just 300 megawatts of IT load, and existing sites carry spare power that can support more GPUs without new grid hookups at all. Together, AI and Fireworks AI both renewed and expanded their contracts, the kind of repeat business IREN needs to prove the platform works beyond one flagship deal with Microsoft.
A Balance Sheet Still Absorbing The Pivot
The cost of walking away from Bitcoin mining is showing up directly on the income statement. IREN posted a net loss of $684 million for the fourth quarter, driven mostly by $450.4 million in noncash impairments as mining hardware got decommissioned, on top of $638.8 million in impairments for the full fiscal year tied to the same transition. Total revenue actually fell $7.6 million from the prior quarter to $137.2 million as IREN pulled mining rigs offline to make room for GPU installs, and adjusted EBITDA dropped to $19.2 million from $59.5 million as employee costs and platform investment ramped up. That spending is not slowing down. Cash SG&A is expected to climb another $40 million to $50 million in the first quarter of fiscal 2027 alone, and headcount nearly tripled in fiscal year 2026, with similar growth expected again in fiscal 2027.
Layered on top of that is a capital expenditure plan of $25 billion to $30 billion for fiscal 2027, a figure CFO Anthony Lewis cautioned depends on “final costings, construction schedules, delivery timelines for GPUs and long lead items.” Co-CEO Daniel Roberts raised a related concern about the physical build-out generally: securing power, permitting land, and finishing data centers can stretch across several years, a lead time mismatch that cuts both ways. It protects IREN’s existing sites from new competition showing up overnight, but it also means any misstep in construction or financing could leave expensive commitments unmet.
Wall Street Is Piling In, Cautiously
Hedge fund ownership of IREN climbed from 53 funds to 69 funds quarter over quarter, a meaningful jump in institutional interest. At the same time, short sellers have not backed off, with 27.24% of the float sold short, a level signaling heavy organized skepticism. That combination points to a stock that has convinced some big investors while leaving others skeptical the story holds up.
Two Companies In One Balance Sheet
IREN is running two businesses at once, an AI infrastructure platform still landing new customers and financing, and a legacy mining operation still absorbing decommissioning costs. The bull case rests on contracted revenue, aggressive financing terms, and a stack IREN owns end to end, but it still needs the next three Horizon phases to land on schedule. The bear case rests on a heavy net loss and a capital plan large enough to reshape the balance sheet for years, and it needs that spending to go off without the delays management itself flagged as a risk.
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