TLDR
- Jefferies launched IREN coverage with a Buy rating and $79 price target, suggesting approximately 30% upside from the $60.50 level.
- Shares of IREN climbed roughly 5% in premarket trading Thursday after the analyst note.
- The firm highlighted IREN’s partnerships with Microsoft and Nvidia, which could generate $3.1B in annual recurring revenue.
- Jefferies projects IREN’s AI cloud strategy will yield superior long-term returns (~21%) compared to colocation models (~13%).
- The company is pursuing global growth, including acquiring Spanish developer Nostrum and launching an 800 MW facility in South Australia.
Shares of IREN Limited (IREN) climbed approximately 5% during Thursday’s premarket session following a bullish initiation from Jefferies, which assigned a Buy rating alongside a $79 price target. Trading around $60.50 ahead of Thursday’s open, the stock responded positively to the Wall Street firm’s endorsement.
Jefferies analyst Jonathan Petersen spearheaded the coverage launch, emphasizing IREN’s extensive power infrastructure and its strategic transition from Bitcoin mining operations toward AI cloud services as key drivers behind the optimistic outlook.
According to Jefferies’ analysis, IREN controls approximately 6 gigawatts of secured power capacity worldwide. With only about 10% currently deployed, the firm views this untapped potential as a significant growth catalyst.
The centerpiece of IREN’s business transformation involves major agreements with Microsoft and Nvidia. The Microsoft arrangement at Childress represents a five-year, $9.7 billion commitment for Nvidia GB300 GPU infrastructure. This deal features a $1.9 billion upfront payment plus $3.65 billion in GPU financing at approximately 6% interest.
The Nvidia partnership, valued at $3.4 billion for AI Cloud services, was announced shortly thereafter. According to Jefferies, these two agreements combined position IREN to achieve $3.1 billion in annual recurring revenue.
Jefferies’ analysis suggests the Microsoft deal’s framework enables IREN to recover its $8.8 billion capital investment during the contract period, generating unlevered internal rates of return exceeding 20%.
AI Cloud vs. Colocation
Jefferies presented a compelling case supporting IREN’s decision to operate proprietary AI cloud infrastructure rather than adopting a pure data center leasing approach. The firm’s modeling indicates AI cloud operations could deliver approximately 21% returns over a 10 to 20 year horizon, substantially outpacing the estimated 13% returns from colocation models.
This performance gap widens over extended timeframes, and Jefferies contends that direct ownership of land and facilities provides IREN with strategic flexibility unavailable to companies focused solely on leasing arrangements.
Petersen characterized IREN as occupying “a unique place among AI infrastructure providers,” highlighting how property and facility ownership enables the company to accommodate diverse customer requirements, from basic powered shell configurations to comprehensive GPU cloud deployments.
Global Expansion
IREN continues advancing its international footprint. The company recently completed its acquisition of Nostrum, a Spanish AI data center developer controlling approximately 490 megawatts of grid-connected power throughout Europe.
Prior to that transaction, IREN revealed intentions to construct an 800-megawatt data center complex in South Australia, designed to address AI infrastructure demand throughout the Asia-Pacific market.
Jefferies also highlighted IREN’s financial position as healthy. After accounting for GPU procurement and data center construction expenditures, the firm calculates IREN maintains roughly $250 million in available capital for additional initiatives. However, some market observers suggest this figure could approach $900 million when recent fundraising activities are incorporated.
Jefferies positioned IREN as a direct rival to CoreWeave (CRWV) and Nebius (NBIS), companies operating within the same vertically integrated AI infrastructure sector.
IREN stock finished Wednesday’s session near $60.50, making Jefferies’ $79 price objective approximately 30% above current trading levels.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
