Can IREN's 150K GPU Fleet Drive $3.7B AI Cloud ARR Target in 2026?

IREN Limited IREN is increasing its AI cloud capacity to 150,000 graphics processing units (GPUs), which management believes is the key to support its target of more than $3.7 billion in AI cloud annualized run-rate (ARR) revenues by the end of 2026. IREN's latest expansion includes a purchase agreement of more than 50,000 NVIDIA B300 GPUs. This expands the company’s total GPU fleet to 150,000 GPUs. These GPUs are expected to be deployed in Mackenzie, British Columbia and Childress, Texas, using IREN’s existing air-cooled data center capacity.

The company plans to deploy the GPUs in phases during the second half of 2026. The target looks possible because IREN already has a good amount of AI cloud revenues under contract. During its fiscal second-quarter 2026 earnings call, management said the company had about $2.3 billion of annualized revenue run rate under contract. This includes the Microsoft deal and about $0.4 billion of contracted revenues at Prince George. Management also said customer demand remains strong and that the company is in multiple advanced talks for large-scale deployments.

IREN also looks better placed from a funding point of view. The company said it has secured $9.3 billion of funding over the past eight months through customer prepayments, convertible notes, GPU leasing and GPU financing. This matters because AI cloud expansion needs heavy spending upfront. For the latest GPU orders, IREN expects about $3.5 billion of additional capex, including GPUs, servers, storage, networking, labor and other related equipment.

For now, the target depends on execution. IREN's ability to deploy these GPUs on time, sign more customer contracts and ramp customer workloads through the second half of 2026 will be the key to hitting the target of $3.7 billion in AI cloud revenues by 2026. The Zacks Consensus Estimate for fiscal 2026 and 2027 indicates revenue growth of around 95% and 193.9%, respectively.

IREN Stock Faces Stiff Competition

IREN faces intense competition from Applied Digital APLD and TeraWulf WULF in the AI infrastructure space.

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 goal is to turn available power into usable, high-density AI capacity for large customers.

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. These acquisitions support TeraWulf’s strategy of reusing existing energy infrastructure to meet growing power and computing demand.

IREN’s Price Performance, Valuation & Estimates

Shares of IREN have lost 7% in the year-to-date period compared with the Zacks Financial Miscellaneous Services industry’s decline of 17.7%.

IREN YTD Price Return Performance

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IREN shares are overvalued, as suggested by the Value Score of F. In terms of forward price/sales, IREN is trading at 4.68X compared with the industry’s 2.59X.

IREN Forward 12 Months (P/S) Valuation

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The Zacks Consensus Estimate for IREN’s fiscal 2026 earnings is pegged at 54 cents per share, revised down over the past 60 days, but marking a substantial year-over-year increase.

Image Source: Zacks Investment Research

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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Applied Digital Corporation (APLD): Free Stock Analysis Report

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

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