IREN shares fall as AI revenue passes mining

IREN shares fell more than 6% in premarket trading to about $38 after the Nvidia-backed neocloud reported that AI cloud revenue exceeded revenue from its Bitcoin mining operations in the most recent quarter.

The company, formerly Iris Energy, said AI cloud revenue rose to more than $70.5 million in the quarter from $33 million a year earlier. For the first half of the year, AI revenue totaled over $128.8 million. Bitcoin mining revenue declined to $66 million from $111 million in the same period last year. Total revenue for the quarter fell to $137 million from $144 million a year earlier.

Impairments increased to more than $450 million in the quarter, up from about $140 million previously. That contributed to a net loss exceeding $684 million for the quarter, compared with a loss of $247 million a year earlier. Operating cash flow pressures and higher capital spending widened the company’s cash burn to $303 million. IREN reported more than $2.1 billion in capital expenditure for the quarter to expand data center capacity. Long-term debt rose to over $7.4 billion from roughly $962 million a year earlier.

Management said demand for compute remains strong and that capacity bookings through 2027 are nearly sold out. In a statement, IREN’s chief executive wrote, “This year, that founding thesis became tangible. Exponential AI consumption growth has fueled demand for compute capacity well beyond the available supply of infrastructure. IREN was built for this moment.”

Market participants flagged the company’s financing needs as a near-term concern. Analysts noted that continued capital requirements for data center buildouts are likely to keep the company borrowing and could prompt additional fundraising and potential shareholder dilution. Technical indicators showed the stock pulled back from a mid-August high and was trading below its 50-day exponential moving average with the relative strength index trending downward. Some forecasts see the shares under pressure to the high-$20s in the near term, while other analyst models, including projections from Cantor Fitzgerald and BTIG, indicate the shares could recover above $90 if AI demand continues to expand.

IREN began as a Bitcoin miner and changed its name from Iris Energy as it shifted to providing infrastructure for AI workloads. The latest quarter reflects that shift, with AI revenue now outpacing mining revenue.