IREN (IREN) vs. CORZ and APLD: Can Its AI Cloud Buildout Turn Contracted Demand Into Profits?

Is IREN a good stock to buy? We came across a bullish thesis on IREN Limited on Compounding Your Wealth’s Substack by Sergey. In this article, we will summarize the bulls’ thesis on IREN. IREN Limited’s share was trading at $37.93 as of August 6^th 2026. IREN’s trailing and forward P/E were 47.82 and 136.99 respectively according to Yahoo Finance.

IREN Limited is shifting away from Bitcoin mining and building itself into a cloud computing company for artificial intelligence. This means securing power, building data centers, installing GPUs (the chips that power AI), and delivering computing capacity to customers. Its fastest growing business is AI Cloud, and that is now the real story behind the stock. Compared to companies like CoreWeave or Nebius, IREN is less about software and more about physical execution — securing land and power, building and connecting data centers, and getting them ready for customers.

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In the third quarter of fiscal 2026, revenue fell to $144.8 million from $184.7 million the previous quarter, adjusted profit (EBITDA) dropped to $59.5 million from $75.3 million, and the company posted a net loss of $247.8 million. This decline shows that investors are not focused on the shrinking mining business. Instead, they are betting on IREN turning its AI contracts into a much bigger infrastructure business.

The bullish case is built on the idea that power and ready-to-use computing capacity are becoming more valuable as demand for AI grows. IREN can expand by bringing more secured power online and installing more GPUs on that capacity. Converting existing sites in British Columbia and Texas to air-cooled systems gives it a faster way to start earning revenue than building entirely new liquid-cooled data centers. The numbers support this shift: Bitcoin mining revenue fell to $111.2 million from $167.4 million as older mining hardware was retired, while AI Cloud revenue nearly doubled to $33.6 million from $17.3 million.

Management’s plan for 2026 is ambitious: 480 megawatts of AI Cloud capacity, 150,000 GPUs, and $3.7 billion in annual recurring revenue by year-end. Secured power has already grown to 5 gigawatts, with new sites planned in Europe and Asia Pacific. The first phase of its Childress site, called Horizon 1, is set to be handed over to Microsoft in the third quarter, with three more phases planned by year-end. About 3,000 workers are currently on site, which shows the scale of construction underway. If these projects stay on schedule, bulls expect a quick shift toward a much larger AI Cloud business. The fact that all current capacity is already booked by customers also suggests IREN is limited by supply, not by lack of demand.

This bullish view is reinforced by IREN’s five-year, $3.4 billion AI Cloud contract with NVIDIA, expected to generate around $700 million a year and covering 60 megawatts of Blackwell chip capacity at Childress. NVIDIA has also committed to investing up to $2.1 billion, which will be paid out gradually as infrastructure is built, becoming fully invested once IREN deploys 600,000 GPUs. Microsoft remains IREN’s most important customer for now, and about 95% of the money needed for GPU purchases is expected to come from customer prepayments and equipment financing rather than IREN’s own cash. Because so much future revenue already depends on these commitments, investors will be watching closely whether IREN can actually build and deliver on time — any delay would make the 2026 targets harder to hit.

Still, the biggest risks to this story are the cost and difficulty of construction. Even if AI demand is as strong as expected, IREN still needs to build, connect, and hand over each site before it can earn revenue from it — and it hasn’t finished that process yet. The $247.8 million quarterly net loss was largely driven by $140.4 million in non-cash write-downs and $23.7 million in unrealized losses tied to financial hedges.

The fact that AI Cloud is growing quickly while overall revenue and profit are falling shows that this new business isn’t yet big enough to make up for the shrinking mining side. IREN is also relying heavily on a small number of large customers, while simultaneously integrating two recent acquisitions, Mirantis and Nostrum. Growing this fast leaves the company exposed to construction delays, higher borrowing costs, integration problems, or issues handing sites over to customers.

Hedge fund positioning shows a mixed signal. As per our database, 53 hedge funds held IREN Limited at the end of the first quarter, up from 46 the quarter before. This increase suggests institutional investors are gaining confidence in IREN’s power position and long-term AI opportunity, even as concerns about funding and execution remain. In comparison, Core Scientific Inc. (NASDAQ:CORZ) was held by 81 hedge funds, up from 76, Applied Digital Corporation (NASDAQ:APLD) was held by 39 hedge funds, down from 40, and Hut 8 Corp. (NASDAQ:HUT) was held by 60 hedge funds, down from 64. This shows IREN saw the strongest rise in hedge fund interest among its peers this quarter, while Core Scientific remained the most widely held stock in the group, and interest in Applied Digital and Hut 8 slipped slightly.

Short interest data paints a more cautious picture. About 27.09% of IREN Limited’s available shares are currently sold short, the highest in the group, ahead of Applied Digital Corporation (NASDAQ:APLD) at 26.33%, Core Scientific Inc. (NASDAQ:CORZ) at 22.43%, and Hut 8 Corp. (NASDAQ:HUT) at 11.58%. This means that, despite rising hedge fund ownership, a large number of investors are still betting against IREN’s stock. That level of skepticism points to real concerns about its heavy spending, reliance on a few large customers, and its ability to deliver new sites on schedule without running into financing trouble.

Overall, the bullish case for IREN depends on a few clear milestones: Horizon 1 being handed to Microsoft on time in the third quarter, the following phases progressing through year-end, AI Cloud revenue continuing to grow, and GPU financing keeping shareholder dilution low. The key question for investors is whether IREN can convert its secured power, planned AI Cloud capacity, GPU targets, and revenue goals into real earnings and cash flow quickly enough to prove that execution — not opportunity — is the real challenge ahead.

Previously, we covered a bullish thesis on IREN Limited (IREN) by Anxious-Criticism652 in May 2025, which highlighted its AI cloud expansion, renewable-powered infrastructure, GPU deployment, and scalable data-center potential. IREN’s stock price has appreciated by approximately 315.89% since our coverage. Sergey shares a similar view but emphasizes on contracted AI revenue, NVIDIA partnership, 5GW power capacity, and execution.

Disclosure: None.