IREN Limited (IREN) shares rose after the company announced it had signed new multi-year contracts to provide cloud services for artificial intelligence developers totaling $2.8 billion. At the same time, IREN raised its forecast for annual recurring revenue (ARR) from its AI Cloud segment for the end of 2026 from $3.7 billion to more than $4 billion.
About IREN
IREN Limited is a provider of infrastructure for artificial intelligence and high-performance computing. The company is developing a network of data centers powered primarily by renewable energy sources and provides cloud services to the largest AI developers. In recent years, IREN has been actively transforming its business, shifting its focus from cryptocurrency mining to the AI Cloud market and cloud infrastructure.
What the new AI contracts mean for IREN’s business
IREN entered into new long-term contracts totaling $2.8 billion with major participants in the artificial intelligence market, including Microsoft, NVIDIA, Perplexity, and other AI developers. The agreements, with an average term of about four years, provide for the delivery of cloud computing infrastructure for training and running artificial intelligence models, through which the company has already secured about 85% of its updated annual recurring revenue (ARR) forecast with existing contracts.
An additional advantage of the new agreements is customers’ upfront payments, covering about 45% of IREN’s costs for purchasing graphics processing units (GPUs). This reduces the company’s need to raise additional capital to expand computing capacity and build new data centers.
Why the new AI contracts support the outlook for IREN shares
Freedom Broker analyst Vladimir Chernov notes that the new contracts confirm IREN’s successful transformation into one of the leading providers of cloud infrastructure for artificial intelligence.
According to Vladimir Chernov, a significant cash balance and upfront funding from customers allow IREN to implement its program to expand computing capacity to 1.2 GW by 2027 with lower financial risks. At the same time, the key uncertainty factors remain the timelines for commissioning new data centers, the availability of advanced GPUs, and the effectiveness of managing rapidly growing infrastructure.
Despite these factors, the current contract portfolio and the upward revision of the revenue forecast form a solid foundation for further growth in the company’s market capitalization. The analyst expects the positive momentum in IREN’s share performance to continue.
What investors need to know
Earlier, Freedom Broker wrote that a $3.4 billion contract with NVIDIA could provide IREN shares with upside potential of more than 30%.
Before that, the company also signed a long-term agreement with Microsoft to provide computing capacity totaling $10 billion, which became one of the key milestones in IREN’s transformation into an AI infrastructure provider.
In addition, in June IREN announced a program to raise up to $1 billion via an at-the-market (ATM) equity offering mechanism. The company is directing the proceeds toward further expansion of data centers and the development of cloud infrastructure for artificial intelligence.
This is not an individual investment recommendation.