IREN's AI Power Play: Bernstein's Bold 80% Valuation Gamble

Bernstein has raised its price target for IREN (IREN) to $75 from $20, implying an 80% upside from its recent closing price, as the Bitcoin miner’s AI cloud expansion gains momentum. The firm’s analysts, led by Gautam Chhugani, cited IREN’s strategic pivot toward building a vertically integrated AI cloud infrastructure rather than relying on co-location partnerships, which differentiates it from peers like CoreWeave. This shift has driven a re-rating of the stock, with Bernstein adopting a sum-of-the-parts valuation model that attributes 87% of IREN’s enterprise value to its AI cloud and co-location potential, compared to just 13% for Bitcoin mining. The price target reflects a valuation of $7.5 million per megawatt, a premium to AI-focused miners but still below traditional neocloud peers like CoreWeave, which trade at multiples of $33 million per megawattAI Bet Means Big Upside for IREN - CoinDesk^[1].

IREN’s AI cloud business has seen exponential growth, with the company expanding its GPU fleet to over 23,300 units, including Nvidia’s Blackwell chips. It aims to achieve $500 million in annual recurring revenue by Q1 2026, up from $14 million in early 2025. Bernstein highlighted the company’s control of 3 gigawatts of low-cost power capacity, which allows it to balance Bitcoin mining and AI workloads while maximizing revenue per megawatt. The firm noted that IREN’s existing Bitcoin mining operations generate approximately $600 million in annualized EBITDA at current Bitcoin prices, providing financial flexibility to fund its AI expansionBernstein raises Iren stock price target to $75 on AI cloud expansion^[2].

The stock has surged over 365% year-to-year, reaching a 52-week high of $47.10, as investors bet on its dual business model. Bernstein analysts acknowledged early skepticism about IREN’s ability to execute a capital-intensive data center buildout but now view its AI cloud pivot as credible. The firm emphasized the company’s 98% hardware margins and near-full utilization of early deployments, underscoring its competitive positioning. Additionally, IREN’s market cap of $12.2 billion now exceeds its closest Bitcoin mining rival, Marathon Digital (MARA), by nearly doubleIREN Shares Surge as Bernstein Raises Price Target - Phemex^[3].

The valuation shift reflects broader industry trends, as AI infrastructure demand strains power grids and drives valuations higher. IREN’s vertically integrated approach—owning power, land, and data centers—positions it to capture full GPU economics, unlike peers reliant on co-location deals. Bernstein’s analysis also noted the company’s flexibility to toggle between Bitcoin mining and AI hosting based on economic conditions, a strategic advantage in volatile markets. However, the firm cautioned that execution risks, such as scaling data center operations and securing financing, remain challenges3 AI Infrastructure Stocks Riding the Coming Power Crunch^[4].

IREN’s recent expansion includes a $130 million investment in 2,400 NVIDIA Blackwell GPUs, increasing its total fleet to 4,300 units. The company plans to utilize its 50MW power capacity in Prince George, BC, to host over 20,000 Blackwell GPUs, further solidifying its AI infrastructure. With demand for AI-native enterprises and hyperscalers rising, IREN’s phased growth strategy aims to capitalize on the supply-constrained market for next-generation compute resources. Bernstein’s analysts concluded that IREN’s AI business still has room for multiple expansion as it transitions from proof-of-concept to long-term contractsIREN Expands AI Cloud with 2.4k NVIDIA Blackwell GPUs^[5].