IREN's $9.7B Microsoft Deal Faces Skepticism as Insiders Cash Out, Analysts Warn

IREN Limited (NASDAQ: IREN) has secured a landmark $9.7 billion multi-year GPU cloud services contract with Microsoft, marking a pivotal expansion in its AI infrastructure ambitions. The agreement, announced on October 31, 2025, grants Microsoft access to NVIDIA GB300 GPUs over five years, with a 20% upfront prepayment. IREN also inked a $5.8 billion deal with Dell Technologies to procure the GPUs and ancillary equipment, with deployment phases set to begin in 2026 at its 750MW campus in Childress, Texas, according to a Nasdaq report. The GPUs will be integrated with new liquid-cooled data centers supporting 200MW of critical IT load, as detailed in a Quiver Quant report.

The contract is expected to fund capital expenditures through a mix of existing cash, customer prepayments, operating cash flows, and additional financing initiatives, according to a Yahoo Finance report. Daniel Roberts, IREN's co-founder and co-CEO, emphasized the partnership's validation of IREN's vertically integrated AI cloud platform, stating it "opens access to a new customer segment among global hyperscalers," in an Investing.com article. Microsoft's Jonathan Tinter highlighted IREN's expertise in building fully integrated AI infrastructure, calling the collaboration a "strategic" move for both companies, according to a MarketScreener report.

IREN's stock surged nearly 22% in pre-market trading following the announcement, with shares climbing to $74.15, according to Nasdaq. This follows a year of volatility for the company, which transitioned from bitcoin mining to AI cloud services, achieving a 500% surge in share price earlier this year, as reported by Quiver Quant. However, recent analyst sentiment has been mixed. J.P. Morgan and HC Wainwright both reiterated "Sell" ratings, citing valuation concerns and execution risks in a Globe and Mail report. HC Wainwright lowered its FY2026 earnings estimate for IREN to $0.93 per share from $1.22, maintaining a $45 price target in a MarketBeat note.

Despite the bullish contract, insider trading activity has raised eyebrows. Co-CEOs William and Daniel Roberts sold 1 million shares each in September, netting $33.1 million, as reported by The Globe and Mail. Institutional investors have also shown divergent moves, with FMR LLC adding 8.6 million shares in Q2 2025, while D. E. Shaw & Co. reduced its stake by 100%, according to Quiver Quant. The stock's recent performance has drawn comparisons to peers like Core Scientific, whose shareholders are skeptical about a $9 billion merger with CoreWeave, per a Seeking Alpha piece.

IREN's pivot to AI infrastructure has positioned it as a key player in the race to meet surging demand for cloud computing. The company's 3GW secured power portfolio in North America and partnerships with tech giants like Microsoft underscore its strategic advantage, observers noted in Investing.com. Yet, analysts caution that reliance on prepayments and financing could strain liquidity, particularly if deployment timelines face delays, Quiver Quant warns.

As the AI arms race intensifies, IREN's ability to execute on this $9.7 billion contract—and maintain credibility with both investors and partners—will be critical to its long-term success.