IREN Limited Rises 22% in 6 Months: Buy, Sell or Hold the Stock?

IREN Limited IREN shares have surged 21.6% over the past six months, outperforming the broader Zacks Finance sector and the Financial - Miscellaneous Services industry’s decline of 0.1% and 28%, respectively.

IREN’s focus on no longer being a pure-play crypto-mining company while evolving into an AI Cloud Service Provider seems to bode well for the company’s prospects. Currently, IREN has an opportunity to capitalize on the emerging AI space as the need for AI compute infrastructure, which is witnessing a CAGR of 23.8%, per a report by MarketsAndMarkets, is growing much faster than the crypto mining market.

6-Month Price Return Performance

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IREN is witnessing strong momentum in its artificial intelligence (AI) Cloud Business, which increased 136.9% on a sequential basis to $17.3 million in the second quarter of fiscal 2026, up from the prior quarter’s $7.3 million. Buoyed by this momentum, IREN is aiming to reach $3.7 billion in annualized run-rate revenues (ARR) by the end of 2026, mainly from its AI cloud business.

IREN has been riding on strong enterprise demand for its AI Cloud Business. But with the stock outperforming the industry and sector, the question arises: Does it still have room to run, or is it time for investors to consider taking profits? Let’s find out.

IREN Benefits From Strong Momentum in AI Cloud

IREN recently announced plans to expand the capacity of its AI cloud infrastructure, where the company has agreed to purchase more than 50,000 NVIDIA B300 graphics processing units (GPUs). After this purchase, the company’s total GPU fleet is expected to reach 150,000 GPUs. IREN expects this capacity to support more than $3.7 billion in AI cloud ARR by the end of fiscal 2026.

The additional GPUs will be deployed in phases during the second half of fiscal 2026. They will be installed in IREN’s existing air-cooled data centers in Mackenzie, British Columbia and Childress, TX. Since these facilities already have power and infrastructure in place, IREN can add GPUs without building new data centers. In the second quarter of fiscal 2026, IREN reported around $2.3 billion of ARR under contract, which includes its large AI cloud agreement with Microsoft MSFT and about $0.4-$0.5 billion of ARR from the Prince George site. This shows that the company already has a strong base to start from.

IREN has also raised significant capital to support the expansion of its AI cloud capacity. Over the past eight months, IREN raised about $9.3 billion through customer prepayments, convertible notes, GPU leasing and GPU financing. In the second quarter of fiscal 2026, IREN secured $3.6 billion in GPU financing and received $1.9 billion from Microsoft in customer prepayments, which together cover about 95% of the GPU-related capital spending tied to the Microsoft contract. Further, IREN plans to raise around $3.5 billion in additional capital spending for the new GPU orders in the second half of 2026 to fund its AI cloud infrastructure expansion.

Another positive is power availability. In the second quarter of fiscal 2026, IREN stated that it has more than 4.5 gigawatts (GW) of secured power, which management said is hard to find in the current data center market and reaching its $3.7 billion ARR target by the end of 2026 would use only about 10% of this power. This means most of the power capacity is still available for future growth. This gives IREN room to add more AI customers over time.

The above-mentioned shows that the company remains well-positioned to deploy around 150,000 GPUs by the end of 2026, which should support the company's goal to reach the $3.7 billion ARR target by the end of 2026. The Zacks Consensus Estimate for IREN's fiscal 2026 and 2027 revenues indicates year-over-year growth of 92.7% and 183.2%, respectively.

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IREN Stock Faces Stiff Competition

IREN faces intense competition from Applied Digital APLD and TeraWulf WULF in the AI infrastructure space. While the AI data center market provides a strong growth outlook, solid competition from already-established players, such as Applied Digital and TeraWulf, multiplies competition for IREN.

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 campus is built to expand further starting in 2028, depending on demand. The goal is to turn available power into usable, high-density AI capacity for large customers. Applied Digital's buildout of Delta Forge 1 is designed to scale with customer demand while providing reliable performance. Initial operations at Delta Forge 1 are expected to begin in mid-2027.

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. The company plans to add 250 to 500 MW of new contracted capacity each year, depending on customer demand and power availability. These acquisitions support TeraWulf’s strategy of reusing existing energy infrastructure to meet growing power and computing demand.

Valuation: IREN Trades Above Industry at Present

IREN shares are overvalued, as suggested by the Value Score of F. In terms of forward price/sales, IREN is trading at 5.5X compared with the Zacks Financial Miscellaneous Services industry’s 2.67X.

IREN Forward 12 Months (P/S) Valuation Chart

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Conclusion: Hold IREN Stock Right Now

IREN’s focus on moving into AI cloud services is showing good early results, and the company has strong contracts, funding support, and enough power capacity to grow over time. However, intense competition in the AI infrastructure space from already-established players, such as Applied Digital and TeraWulf, multiplies competition for IREN, and a premium valuation warrants a cautious approach to the stock.

Currently, IREN carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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