IREN Limited IREN has entered into a major partnership with NVIDIA to strengthen its AI cloud business. The partnership was announced on the latest earnings call in the third quarter of fiscal 2026, where the company signed a $3.4 billion, five-year AI cloud contract with NVIDIA to deploy Blackwell GPUs across 60 megawatts of air-cooled capacity at its Childress campus in Texas. The above-mentioned contract should contribute around $700 million in annual recurring revenues (ARR).
IREN exited the third quarter with $3.1 billion in ARR under contract and reiterated its target of reaching $3.7 billion in ARR by the end of 2026. Here, growth is expected to accelerate in the second half of 2026 as additional GPU capacity comes online. As of now, all operational AI cloud capacity is already fully contracted, and demand for near-term GPU infrastructure remains higher than available supply, particularly for air-cooled AI capacity scheduled for deployment in late 2026 and early 2027.
To support this growth, IREN plans to expand AI cloud capacity to 480 megawatts through the deployment of 150,000 GPUs by the end of 2026. Further, IREN is converting its existing Bitcoin mining facilities in Texas and British Columbia into AI cloud infrastructure. Here, IREN's Horizon 1, a liquid-cooled data center at Childress, which will support liquid-cooled deployment for GPU commissioning for Microsoft, is already underway, while Horizons 2 to 4 remain on track for completion in 2026.
IREN’s financial results reflect its ongoing shift toward AI cloud services. AI Cloud Services revenues were $33.6 million compared with $17.3 million in the previous quarter, reflecting sequential growth of 94.2%. Here, strong AI infrastructure demand and rising contracted capacity are expected to continue supporting growth in IREN's AI cloud business. The Zacks Consensus Estimate for fiscal 2026 and 2027 indicates revenue growth of around 93.8% and 191.8%, respectively.
IREN Stock Faces Stiff Competition
IREN faces intense competition from Applied Digital APLD and TeraWulf WULF in the AI infrastructure space.
In January 2026, Applied Digital announced that it had started construction on Delta Forge 1, a large AI data center campus in a southern U.S. state. Delta Forge 1 is designed to support up to 430 megawatts (MW) of total utility power in its initial phase. This can support up to 300 MW of critical IT load. The goal is to turn available power into usable, high-density AI capacity for large customers.
In February 2026, TeraWulf announced the expansion of its digital and power infrastructure portfolio through the acquisition of two existing sites in Kentucky and Maryland. Together, these two acquisitions add about 1.5 GW of power capacity to the company’s portfolio. With these additions, TeraWulf’s total platform size increases to about 2.8 GW across five sites. These acquisitions support TeraWulf’s strategy of reusing existing energy infrastructure to meet growing power and computing demand.
IREN’s Price Performance, Valuation & Estimates
Shares of IREN have surged 48.6% in the year-to-date period against the Zacks Financial Miscellaneous Services industry’s decline of 6.1%.
IREN YTD Price Return Performance
Image Source: Zacks Investment Research
IREN shares are overvalued, as suggested by the Value Score of F. In terms of forward price/sales, IREN is trading at 6.99X compared with the industry’s 3.0X.
IREN Forward 12 Months (P/S) Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for IREN’s fiscal 2026 earnings is pegged at 55 cents per share, revised up by a penny over the past seven days, and marking a substantial year-over-year increase.
Image Source: Zacks Investment Research
Currently, IREN carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Applied Digital Corporation (APLD): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).