We recently compiled a list of the Top 10 AI News Updates Investors Should Not Miss. In this article, we are going to take a look at where IREN Limited (NASDAQ:IREN) stands against the other AI stocks.
The Internet of Things, machine learning, and artificial intelligence are the key catalysts driving trends in the semiconductor market. Likewise, the market is expected to grow by $157.1 billion at a compound annual growth rate of 4.5% by 2029, as per estimates by Technavio. The growth would be fueled by the growing need for chips to power the telecom sector, automotive, consumer electronics, IT and communications, healthcare, aerospace and defence, and consumer goods.
Similarly, the growing demand for semiconductors brought on by emerging technologies like 5G, AI, and the Internet of Things (IoT) presents serious challenges for the semiconductor industry. Two to four million gallons of ultra-pure water are needed every day at a single semiconductor fabrication plant, which uses about one Terawatt-hour (TWh) of energy annually.
Additionally, tussles between nations could pose significant challenges to the semiconductor sector, consequently hindering the development of artificial intelligence innovations. Countries passing protectionist measures to curb access to advanced semiconductors are seen as one hindrance to the robust growth projected.
In addition to its potential to improve access to food, healthcare, and education, artificial intelligence (AI) can also aid in developing biological and other weapons, support cyber attacks, aid in surveillance, and contribute to other human rights violations.
“The potential military, intelligence, surveillance, and cyber-enabled applications of these technologies and products pose risks to U.S. national security particularly when developed by a country of concern such as the PRC,” the Treasury Department notification said.
The US has already passed restrictions on Chinese firm’s access to advanced semiconductors and equipment developed by US companies. The restrictions come amid concerns that China’s gaining access to advanced semiconductors could pose significant security risks in the future.
China has also hit back with similar measures. China has blasted the United States for imposing new export restrictions on semiconductors made in the United States, which Washington believes Beijing may use to create the next generation of weapons and artificial intelligence (AI) systems.
“The U.S. has to be prepared for rapid increases in AI’s capability in the coming years, which could have a transformative impact on the economy and on our national security,” U.S. National Security Adviser Jake Sullivan said.
According to US Commerce Department officials, the new controls were intended to undermine China’s domestic semiconductor industry and slow the country’s development of sophisticated AI weapons that could be used in conflict, which pose a threat to US and allied national security. The US was accused of “abusing” export controls, and China’s Commerce Ministry denounced the action, calling it “a significant threat” to the stability of global supply chains and industry.
Amid the robust growth in the semiconductor sector amid a string of protectionist measures by the US and China, there are tremendous opportunities worth pursuing. The development of powerful semiconductors has opened the door for exciting and unique AI innovations increasingly driving stock valuations and shareholder value.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A table full of technology, with bitcoin mining rigs and a laptop showing a financial graph.
IREN Limited (NASDAQ:IREN)
Number of Hedge Fund Holders: 28
IREN Limited (NASDAQ:IREN) is a financial services company that owns and operates Bitcoin and mining data centers. It also provides high-performance computing solutions, including AI cloud service. On February 12th, the company delivered record revenue and operating cash flow for the fiscal second quarter of 2025, attributed to strategic investments made in scale and efficiency in mining operations. Bitcoin mining revenue was up 129% to $113.5 million as net profit totaled $18.9 million, an improvement from a net loss in the same quarter last year.
The robust growth is being driven by strong demand for the company’s Horizon 1, 75MW direct-to-chip liquid deployment system for high-performance computing. IREN Limited (NASDAQ:IREN) is also taking advantage of the AI boom with a new 600MW Sweetwater 2 site, which is expected to create a 2GW data center hub. Last year, IREN purchased 1,080 latest-generation NVIDIA H200 GPUs to support its growing AI Cloud Services business, an investment that seems to be paying off, going by impressive financial results.
Overall IREN ranks 7th on our list of the AI stocks investors should not miss. While we acknowledge the potential of IREN as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than IREN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.