Why IREN (IREN) Is Down 23.1% After Massive Convertible And Equity Raise For AI Growth

• Earlier in December 2025, IREN Limited raised about US$2.30 billion through low‑coupon convertible senior notes and US$1.63 billion via a follow‑on equity offering, using part of the proceeds to refinance existing convertibles and reserve over US$2.07 billion for general corporate purposes and working capital.
• This funding push, tied to IREN’s multi‑year US$9.70 billion AI cloud contract with Microsoft and massive GPU expansion plans, sharply increases both its growth capacity and investors’ concerns about dilution and balance‑sheet risk.
• Now we’ll examine how this large mix of convertible debt and equity funding reshapes IREN’s earlier investment narrative around capital efficiency.

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IREN Investment Narrative Recap

To own IREN today, you have to believe its pivot from bitcoin mining to AI cloud can justify heavy capital spending and dilution tied to the US$9.70 billion Microsoft contract. The December US$3.93 billion mix of low coupon convertibles and new equity bolsters near term funding for GPU buildout, but also sharpens the key short term tension between hitting Microsoft deployment milestones and managing balance sheet and dilution risk.

Against that backdrop, the December 8 convertible note issuance of roughly US$2.27 billion stands out because it both refinances older 2029 and 2030 convertibles and leaves over US$2.07 billion earmarked for general corporate purposes and working capital. That gives IREN more runway to advance Microsoft linked data center projects, while also amplifying investor focus on whether future operating cash flows and AI cloud demand can support this enlarged capital structure.

Yet while the Microsoft contract supports the build plan, investors should be aware that IREN’s capital intensive expansion, funded by significant convertibles and fresh equity, could...

Read the full narrative on IREN (it's free!)

IREN's narrative projects $1.5 billion revenue and $1.0 billion earnings by 2028.

Uncover how IREN's forecasts yield a $81.85 fair value, a 142% upside to its current price.

Exploring Other Perspectives

Twenty one fair value estimates from the Simply Wall St Community range from US$12.47 to US$107.78, showing wide disagreement on IREN’s worth. You can weigh those views against the company’s heavy, debt fuelled AI buildout and its implications for future cash generation and dilution.

Explore 21 other fair value estimates on IREN - why the stock might be worth less than half the current price!

Build Your Own IREN Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your IREN research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision.
• Our free IREN research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate IREN's overall financial health at a glance.

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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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