A Look at IREN Limited (NasdaqGS:IREN) Valuation Following Major AI Cloud Deals and Growth Strategy Shift

IREN (NasdaqGS:IREN) just signed a new round of multi-year cloud service contracts for its NVIDIA Blackwell GPUs, securing major partnerships with leading AI firms. This move is key to IREN’s expanding AI cloud ambitions.

See our latest analysis for IREN.

IREN’s transformation into an AI data center powerhouse has not only caught Wall Street’s attention, but has driven its share price to all-time highs. This rise has been supported by major cloud wins and a landmark $875 million convertible note offering. Over the past 12 months, IREN delivered a 672% total shareholder return. With a 76% 1-month share price return, momentum is clearly building as investors reward its pivot to high-demand AI infrastructure.

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After such a dramatic run-up in both revenue forecasts and share price, the central question for investors is whether IREN remains undervalued at today’s highs or if the market has already priced in future growth potential.

Most Popular Narrative: 17.6% Undervalued

According to BlackGoat, the most widely followed narrative currently suggests IREN’s fair value is materially higher than the latest close. This has fueled speculation about its true upside and is drawing intense focus from both growth investors and skeptics as projections diverge from the market's own caution.

The market began to see IREN’s assets not just as mining infrastructure but as perfectly positioned for the exploding demand in High-Performance Computing (HPC) and AI. Execution highlights included an aggressive HPC pivot with a $674 million investment in nearly 24,000 NVIDIA GPUs to build out its own Cloud Service Provider (CSP) business in Canada.

Read the complete narrative.

Want to know what assumptions drive this big valuation gap? The fair value hinges on bold growth bets and ambitious profit projections far above today’s run-rate. What creative scenario could justify this premium? The answer might surprise you, but you’ll need to read deeper to discover the cornerstone numbers behind the market’s most debated thesis.

Result: Fair Value of $70 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, short-term risks such as further dilution or delays in securing a large hyperscaler contract could quickly shift market sentiment around IREN's bullish narrative.

Find out about the key risks to this IREN narrative.

Another View

Some investors prefer to look at IREN’s valuation using its price-to-sales ratio. Compared to industry averages, IREN trades at a higher multiple, which makes it look expensive relative to the broader US Software sector. This gap could signal greater risk if growth does not live up to expectations. Will the premium prove justified?

See what the numbers say about this price — find out in our valuation breakdown.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out IREN for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own IREN Narrative

If you see things differently or love digging into the numbers yourself, you can craft your own viewpoint in just a few minutes. Do it your way.

A great starting point for your IREN research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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